“We were beaten on price” cried the salesperson with a shrug of the shoulder. “Our competition is really cleaning us out right now”.
When I hear an excuse about a sale being lost based on price, I immediately try to understand how well the salesperson in question differentiated us from the competition and how well they positioned the difference in the product and service being offered.
There are some products which we will call commodity products, that are very price sensitive and very often, the differentiator is price. This in effect could be the USP. Many businesses operate on this model. But many do not and unless you can be the cheapest and continue to make the margin you require to remain in business and grow, then “cheapest” cannot form part of your strategy.
We ask our clients “What’s your unique selling proposition? What do you do that no one else does, how will your product or service serve them any better than the product or service from your competition?” If our clients cannot answer that question in a non-hostile, non-sales environment, how will they relate it with confidence in the heat of battle with a prospective customer.
Determining and articulating your USP is not a 1-minute exercise to be completed. It is bigger than than and extends beyond just the salesperson and the product. Let me explain…
I have a client that installs a product in people’s homes. His product is about 15% more expensive than his competitors. He was struggling to make sales. So we completed a “Developing your USP” exercise.
This involved the following:
Discovering how the product was different from the competitors and how the difference could benefit the customer.
Understanding the method of delivery of the product, how this was different from the competitor and again, how this could benefit the customers.
Clarifying what owning and using the product over a period would mean for the customer and how it would benefit them in the long term. It is called total cost of ownership.
Being clear about what would happen to the customer if they needed support on the product in the future and how this would compare to the competitor based on market research and customer feedback.
Differentiating how the client engagement process in our company was different to the competitors and what that meant to the client during the install process.
You see, the USP in this instance was not one thing – it was a collection of benefits that, when blended, created a real, long term benefit for the customer.
The role of the salesperson is to understand from the customer the elements of the USP that are of particular importance and explain the product or service in relation to this.
That way, the customer can see the value of what they are getting in addition to the price and they make an informed and rational decision because they have been presented with all the features of the product and the particular benefit to them. This is where a USP makes a real difference and it works.