Overcoming Price Barriers Orvel Ray Wilson, CSP Sr. Partner THE GUERRILLA GROUP inc Presented by:

Orvel Ray Wilson, CSP

Sr. Partner

THE GUERRILLA GROUP inc

“ This CD player sells for less than CD players costing twice as much.”

Overcoming Price Barriers Economic Uncertainty

Economic Uncertainty

Overcoming Price Barriers Economic Uncertainty Ruthless Competition

Economic Uncertainty

Ruthless Competition

Overcoming Price Barriers Economic Uncertainty Ruthless Competition Customer Expectations

Economic Uncertainty

Ruthless Competition

Customer Expectations

Overcoming Price Barriers Economic Uncertainty Ruthless Competition Customer Expectations Pressure on Prices and Margins

Economic Uncertainty

Ruthless Competition

Customer Expectations

Pressure on Prices and Margins

Low Bidder “ How did I go broke? I was the low bidder!”

“ Sadly, we have created our own problem. “ When the economy went south, so did sales people's willingness to sell on value. Instead, they panicked and went straight to dropping their pants on price. This abandonment of a solid sales strategy, and value-based selling has led us to where we are today.” Andrew Lingenfelter Director of Network Managed Services Bay Pointe Technology

“ When the economy went south, so did sales people's willingness to sell on value. Instead, they panicked and went straight to dropping their pants on price. This abandonment of a solid sales strategy, and value-based selling has led us to where we are today.”

What do we Mean by “Guerrilla”?

The most successful marketing series in history:

The Total Product Model Generic

Generic

The Total Product Model Generic Expected

Generic

Expected

Technical support “ I know it’s technical support, but for $2.50 a minute I expect you to talk dirty.”

The Total Product Model Generic Expected Augmented

Generic

Expected

Augmented

The Total Product Model Generic Expected Augmented Potential

Generic

Expected

Augmented

Potential

Why you don't want price shoppers as customers They gobble up your capacity If you cut your price by 10%, you have to increase your volume by 40% just to make up the difference. You establish a precedent

They gobble up your capacity

If you cut your price by 10%, you have to increase your volume by 40% just to make up the difference.

You establish a precedent

Why you don't want price shoppers as customers: They’re less discerning They’re more demanding They’re often disloyal Nobody ever gets fired for paying too much.

They’re less discerning

They’re more demanding

They’re often disloyal

Nobody ever gets fired for paying too much.

What to say when you're asked to cut your price: “ Well, it’s a lot like buying oats.” “ Why are you so much more expensive than (the competition)?” “ I RILLY wish I could, but. . . “ What do I tell my next customer?”

“ Well, it’s a lot like buying oats.”

“ Why are you so much more expensive than (the competition)?”

“ I RILLY wish I could, but. . .

“ What do I tell my next customer?”

What to say when you're asked to cut your price: “I’d rather justify my price now, than have to apologize for poor quality later.” “What makes you think that I wouldn’t give you the best possible price right up front?”

“I’d rather justify my price now, than have to apologize for poor quality later.”

“What makes you think that I wouldn’t give you the best possible price right up front?”

How to Counter Dirty Tricks Split the Difference Itemizing The Crunch The Stall

Split the Difference

Itemizing

The Crunch

The Stall

How to Counter Dirty Tricks Quota Time The First-Timer False Quote The Tantrum

Quota Time

The First-Timer

False Quote

The Tantrum

“ Terrible Forty-twos” The Terrible Forty-Twos

When You Shouldn’t Negotiate When you’re sold out When the demands are unethical When you’re time pressured When they act in bad faith When waiting would improve your position.

When you’re sold out

When the demands are unethical

When you’re time pressured

When they act in bad faith

When waiting would improve your position.

What to do with Difficult, Demanding or Dishonest Customers? Refer them to the competition.

Refer them to the competition.

Why Customers Buy:

Why Customers Buy: Confidence Quality Service Selection Price

Confidence

Quality

Service

Selection

Price

Why Customers Buy: Confidence Quality Service Selection Price

Confidence

Quality

Service

Selection

Price

Why Customers Buy: 1. Confidence 2. Quality 3. Service 4. Selection 5. Price

1. Confidence

2. Quality

3. Service

4. Selection

5. Price

To Sell at Higher Prices Never give your product away Know your competition Expect the Sale Collect Testimonials

Never give your product away

Know your competition

Expect the Sale

Collect Testimonials

To Sell at Higher Prices Don’t telegraph that it’s is negotiable Manage damaging information

Don’t telegraph that it’s is negotiable

Manage damaging information

“ Discouraging data on that new antidepressant.”

To Sell at Higher Prices Give goods or services, not cash Guarantee Everything Sunshine Trash Service DOUBLE it

Give goods or services, not cash

Guarantee Everything

Sunshine Trash Service

DOUBLE it

Brussels Sprouts

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Develop Strong Rationales Need . . . Because . . . Only. . .

Need . . .

Because . . .

Only. . .

What to do when they really CAN get it cheaper Compared to what? What the customer REALLY wants is . . . YOUR product YOUR service YOUR reputation and THEIR price.

Compared to what?

What the customer REALLY wants is . . .

YOUR product

YOUR service

YOUR reputation

and THEIR price.

What to do when they really CAN get it cheaper Call their bluff The Spare Tire How do you Know?

Call their bluff

The Spare Tire

How do you Know?

The Gradient If all you want is . . . Price Overhead If money were no object . . . What we do is . . .

Tractor

Require Reciprocal Concessions Never concede anything without asking for something , anything, in return Reserve the right to withdraw a concession Or reserve an unspecified concession in the future.

Never concede anything without asking for something , anything, in return

Reserve the right to withdraw a concession

Or reserve an unspecified concession in the future.

Customers Will Pay More Quality Authenticity Stability Reliability Social or Ecological Values

Quality

Authenticity

Stability

Reliability

Social or Ecological Values

Customers Will Pay More Knowledgeable salespeople “ Mr. Colton, do we stand behind our products?”

Knowledgeable salespeople

Customers Will Pay More Knowledgeable salespeople Reputation Partnership Consistency Customization

Knowledgeable salespeople

Reputation

Partnership

Consistency

Customization

Customers Will Pay More Authority Popularity Exclusivity Scarcity Disposal

Authority

Popularity

Exclusivity

Scarcity

Disposal

Customers Will Pay More Miniaturization Rugidizatoin Expediting

Miniaturization

Rugidizatoin

Expediting

Customers Will Pay More Flexibility $1.39 iTunes w/o DRM Financing Short delivery times Advanced technology Arrives in perfect condition

Flexibility

$1.39 iTunes w/o DRM

Financing

Short delivery times

Advanced technology

Arrives in perfect condition

Customers Will Pay More Problems fixed quickly

Problems fixed quickly

“ You really should have called me sooner.”

Customers Will Pay More Problems fixed quickly Environmentally friendly 78% Said they would pay $2,000 more for a car that gets 35 mpg Benefit a third party

Problems fixed quickly

Environmentally friendly

78% Said they would pay $2,000 more for a car that gets 35 mpg

Benefit a third party

Customers Will Pay More Local Sourcing 82% have consciously supported local or neighborhood businesses Brand Names Referral

Local Sourcing

82% have consciously supported local or neighborhood businesses

Brand Names

Referral

Customers Will Pay More To do the right thing SRI funds account for 11% of all the money in U.S. financial markets More fun.

To do the right thing

SRI funds account for 11% of all the money in U.S. financial markets

More fun.

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