How Not to Sell a Commodity Product
I'm having an amusing time today negotiating a price for a new car. I've gotten a couple of quotes across the Internet and was easily able to get a price below dealer cost. I still haven't test-driven the car, so I don't know if I'm going to buy it, but there's a good chance I'll write a check this evening.
What's funny, and kinda sad, about this is that the dealers are clearly not prepared, in any meaningful way, to keep me from playing them off against each other. They're in a price war for my business and have done nothing -- nada -- to raise the stakes and sell me a "solution."
That's a weird oversight, because I have a 23 year history with one of the two dealers, and even told them that in my email. So they've already got a leg up in getting my business to the point where I would probably have been willing to pay a couple of hundred dollars more, just to do business with them.
I think I'm probably like a lot of informed consumers (and informed B2B buyers) in that I'm willing to do a bit of research to figure out what want and what it should cost. However, I'm also influenced (heavily) by how I'm treated. One of the reasons I really like that dealership is that their service team is top notch.
Same thing with consumer electronics. I tend to buy from J&R because they're easy to work with and because their customer service is 1) American and 2) Reasonable. I will almost always buy from J&R, even if the price is a bit higher than some other website.
Now, it could be that the dealership is waiting until I'm in the dealership to do an upsell, or perhaps to package some services along with the purchase, but it's getting a bit late for that. On the bright side, the salesperson did email me her cell phone number, which was smart.
Anyway, the reason I'm posting this is because it's difficult to see sales professionals passing up a real opportunity to at least use loyalty to their advantage and put the purchase into the context of a larger relationship.
The sad thing is that this is happening everywhere. The Internet is making many product categories into commodities by eliminating proprietary knowledge about pricing. In order to survive and keep margins up, sales professionals MUST raise their game.
It's also true in B2B. Unless you're going to compete on price, you MUST raise the bar and start figuring out how to provide more and better. If you need an example of how this is done, check out how Newell Rubbermaid is turning its consumer brands into B2B solutions for retail outlets. Brilliant stuff.
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