Tell Customers What’s Their True Cost to Purchase
Assume you are now at the center of the dilemma, what’s your feeling? how are you gonna deal with the dilemma.
Sometimes it’s just competition are targeting different market comparing to you are, like they are focusing lower market than you are, or that’s just your customers’ tactics to control the negotiation.
However for your competitors who are just like you with similar market, similar capability, and your customers’ feedback about higher price is real visibly, then you should look into the price, deconstuct the price and tell your customers directly what’s the “Magic” behind your competitions’s price.
A lot of companies probably will quote you an unbelievably low price under which they will ignore and hide a lot of costs customer will eventually endure. Customers is careless and only see this very competitive price that they make a decision and choose the price lower one.
Well, the price they got means the visible quotes they get from the supplier while their cost to purchase includes all the costs until the goods getting to customer’s facility.
What could these costs be?
1.Costs of feright
2.Costs of taxes, duties and brokerage
4.Other hidden costs such as payment terms, cost after sales service
So all those aformentioned costs are what you can use to inspire your customers that what they are missing.
But don’t get this wrong, it is not getting you to slam your competitors, sometimes competitors can really give you pressure and make you run faster to keep up with the whole industry.
What I mean is to get you subtly ask your customer some simple straightforward questions, which your customers will begin to think about what your competition is actually offering after thinking about what you ask.
Here are some questions you can use to get your customer to understand that a lower sticker doesn’t mean a lower cost overall.
1.What your terms of delivery？ FOB？ CIF？ DDP？
2.Do you a prepay for the order？ What’s the portion？
3.What’s your payment terms？
4.Does the price includes duties, taxes and brokerage?
5.Does the price includes customs clearance?
6.How long warranty do you get? Do you have to pay for the extended warranty?
Gather and get to know your competition’s pricing, analyze and deconstruct the pricing, then present to your customer why your offer is actually better.
Don’t give up so quickly once you hear your price is higher, use the simple steps to expose and deconstructed your competitor’s offer by explaining why it’s less expensive to buy from you despite your higher pricing.