Sometimes I think we are beating consumers about their heads over price. We make price the big deal, not the consumer, and often, it’s not about price for them. Stay with me for a moment . . . I recognize that this is definitely a paradigm shift for many of you.
Price and Value are not the same thing. The seller gets price, the buyer gets value.
There are three different categories of buyers:
- Price Driven
- Value Driven
- Design Driven
With those three categories lie a few sub-categories, such as the Price-Value Driven or the Design-Value Driven buyer, the combination of which represent buyers who balance Price with Value or Design with Value.
many of us sell price as though it were value
Three out of the five possibilities revolve around value, yet many of us center our marketing around price. In fact, we often sell price as though it were value. As a result, are we attracting the wrong segment of buyers? The buyers who are shopping strictly based on price, who most likely won’t buy from us because we are not and can not be the lowest priced builder in the market. How many times have you stood there, dumbfounded as your salesperson or sales manager states that the prospect you inquired about bought from another builder because the price was marginally less, and you have said: “What? We build a far superior home to them!”
Frustrating, isn’t it?
Price and value are not the same thing, yet we often mistakenly treat them as such: the seller gets price, the buyer gets value.
A sale will occur when price and value are balanced in the mind of the buyer.
When the buyer gets more value for less price than he/she was expecting, in their minds they got a great deal, a bargain, a steal . . . depending on how much lower they paid than what they determined the true value to be.
Price oriented buyers have always, and will always, complain to the builder/seller that he/she is over-priced, yet often, when they are a seller of an existing home, they complain bitterly about their buyers who, just like themselves, are only concerned with one thing: price. Just ask any Realtor who has had to deal with one on both ends of the sale.
The price oriented buyer does not grasp the value of . . . well, value!
In marketing, we strive to create and build value for out products and price things competitively, yet stay mindful of what a ready, willing and able buyer is willing or prepared to pay. In other words, we may want a margin of 21% ROA but may have to live with 16% because that is all the market will bear.
Value, to the majority of buyers, far exceeds price alone. So as a sales strategy, shift from the focus of selling price alone, broaden your target market and start building value for your homes. Get everyone in your company involved in improving your value.
Get your marketing department to research why you’ve lost sales. Don’t base why you’ve lost sales on what your competition is doing. Ask the people with the answers: the customers that got away. If your marketing department doesn’t have the skill and experience to pull this off, hire someone who does to temporarily help you out.
Put your purchasing department to work figuring out how to incorporate some of the features price-value buyers would enjoy in a home, and finally, train and drill, drill, drill your sales teams on the fundamentals of selling so that they become unconsciously competent and will deliver a planned presentation – the presentation which you help them design – every time without forgetting something they needed to cover that speaks to value in your homes.
There’s a lot that goes into the sale and marketing of homes, and it definitely requires the ability to stay on top of all of these things, but the fun is in the challenge, and the reward is in converting traffic into sales.
So now that you have an idea of which direction to steer the ship, go have fun with it!
To learn more about this radical thinker, click here: About Deborah Fisher
Copyright 2011, Fisher & Company, P.A., Deborah Fisher, DeborahFisherMarketing.com All rights protected.
