Here is an email from a top salesperson in the compact tractor market: "I have a situation with a customer shopping me against out-of-the-area, same-brand dealerships. Is price the real issue here? The customer said he wants to deal with his local dealership and has heard good things about us. However, he has already shopped us and has been quoted lower prices from dealers who are outside our area."
This happens more and more these days. Buyers search the Internet for prices; some dealers quote very low prices to entice buyers to their store. With the myriad models and brands, potential buyers are often tempted by the lowest prices even though their final choice may not be exactly what they need.
How does an honest salesperson combat this? If your customer wants to buy local but is still pricing outside of your area, it’s because he is not yet comfortable with you or he is using this as a negotiation tool. If he is not comfortable with you and your dealership, you need to sell this aspect first. If he is negotiating with you, address the negotiation. This is how to deal with both issues.
The value of local. Most salespeople would tout their dealership’s value. Instead, sell the customer on the idea of buying local. Ask how important it is for him to buy locally as opposed to buying from someone at a distance. You want an answer to this before going further.
Reinforce whatever he says and make comments such as, "Some people shop on the Internet and then find it would have been better to have just gone into a local dealer, talked with someone knowledgeable and bought the right item the first time. One of the biggest problems with buying tractors is that if you make a mistake, it can be a very costly mistake. This is why it is so important to make the right decision the first time.
The local dealer has a bigger incentive to help you make the right decision because he wants to keep local customers happy. If someone from out of state came here to buy a tractor and was only interested in getting the lowest price, most salespeople would not be too concerned about him because they are not likely to see him again. Price is important, but as long as there is no major discrepancy between two dealers, you should always go for the local, more knowledgeable dealer who has a vested interest in you."
Properly positioned, this also takes away some of the customer’s negotiating advantage because you are essentially telling him price is not the only consideration and you may well be more
expensive than the distant competitor.
Price. Price will always be a factor, but when you demonstrate good reasons why the customer should buy from you, price becomes secondary. Of course, your price has to be competitive, but it does not have to be lower. Once you have sold him on buying locally, you can relegate price to its proper position:
"No matter where you buy, you’re still talking about a great deal of money. As I said earlier, if you buy the wrong tractor, it can be a very expensive mistake. If you return it, you will not get back what you paid because it will be used. If you keep it, you will always be unhappy with your purchase. This is why, before we look at price, we should first look at which tractor will do the job for you. Doesn’t it make sense to make the right choice first and then see what that choice will cost? My job is to find what best suits what you are trying to do. Let’s discuss what you want to do with the tractor and then we can look at which model will fill that need. Then we’ll see if it fits into your budget and, if not, we can go to plan B.
"I will also put together two packages for you based on your needs. One will be a Cadillac package that has everything of the best you now need and will need in the future. The other will be a basic package based on your needs today with flexibility to upgrade at little cost later. You can then decide which package suits you better or fits best in your budget."
Up until this stage, the customer’s choice was between you and your competition. By offering two packages, you change the choice to one of two packages. Whichever he chooses, you win.
Listen. If you get this far, listen to your customer! This is when you can demonstrate your expertise by making suggestions on things he can do with the tractor and the right implements. Your job is to help him do what he wants to do.
Will this strategy work for you? I don’t know, but neither do you until you try it. The key is to be assertively proactive rather than defensive when you hear that a prospect can buy the same thing from someone out of town for less.
Frank Lee is an author and sales trainer who specializes in the ag equipment industry. You can subscribe to his free monthly Ezine for Managers, a newsletter sent via e-mail. To receive it, e-mail firstname.lastname@example.org and put "subscribe" in the subject line.