It is your job to properly position your product in the eyes of the dealer and one way to do this is with a “price savings buildup.” Sometimes you may rep a premium product which also carries a premium price (like the original Iomega Bernoulli 90–prior to the Zip Drives) while other times you may rep a “cost-effective,” yet less feature-rich alternative like PFS:Window Works or ReadRight OCR. For credibility’s sake, it is usually preferred to rep a “premium” product–“if” you are capable of selling its premium features. Regardless, you have to do a price savings buildup to sell the price.
What is a “Price Savings Buildup?”
A “price savings buildup” is comparing a product to similar items showing the great savings, value, and benefits that it provides.
What Are Ways You Can Do a Price Savings Buildup?
Each product you rep may or may not have all of the key selling features: a price advantage, exceptional quality, and unique feature benefits (we do represent some products that have all of the advantages, although it is not typical). However, each product should have a strong market edge that gives you a handle to promote. The following are examples of how to promote a product by price, quality, and benefits.
Price
If the product you rep has the lowest price in the industry, and the dealer is comfortable with it, then the price may not be a factor–though quality might. Most of us have seen this in action with the famous Ginsu Knives ads (“But wait… if you order within the next 2 minutes…). If however, the product has a higher price than normal, or the dealer doesn’t know how it compares to its competition, you may have to help the dealer understand a product’s “value.”
Examples
When my field reps were showing Ask*Me 2,000, a multimedia “authoring” program, the multimedia industry was in infancy and unknowing dealers often questioned Ask*Me’s $495 price. For this product, a price comparison was all that was needed:
“Depending on the manufacture, most similar authoring programs run between $695 and $8,000. For example, Icon Author list for $695, Instant Replay sells for $595 and Authorware sells for $7,995! Our product, which has more features and ease of use than them all, usually sells for $995 but at this time, during our saturation campaign, we’ve lowered it to just $495 list. That’s 50% off the regular price! Of course, dealer copies are only $49–the cost of materials.”
The dealer copy, which is all we were really there to sell, appeared negligible–in comparison.
Other examples of website copy where a price savings buildup was used before presenting their price (this is the copy only, but it is formatted much more palatable on their website):
UGRU CRM is the Price Performance Leader. When you combine the cost of popular apps like Redtail or Salesforce, Constant Contact, Quickbooks, HubSpot, and MoneGuidePro, you are easily looking at over $550/month per user! UGRU CRM has more value than all the applications combined, eliminates all double entry, and sells for less than the cost of the apps it replaces. No wonder it is considered the undisputed price performance leader. Plus, the built-in best-practice workflow and increased team performance help you increase sales and helps your clients build maximum value – everyone does better.
ReviewInc provides the best features, customizability, and results — for the price… as the industry price-performance leader.
Affordable. Packages can be up to 40% less than some competitive platforms.
Automation. Save time because the ReviewInc system does the work for you.
Unlimited Users. Add as many team members to the platform as you wish for no additional cost.
Quality
With the early Iomega 90 Bernoulli Box, the $1,295 list price for a 90-megabyte drive was almost always questioned–especially since most well known 80-120 megabyte hard drives at the time were just $350-$420 list. In this case, we couldn’t just compare prices–we would loose–instead, we had to compare usage, quality, features, and expandability:
“The Bernoulli floppy has approximately the same life span as a comparable hard drive and a comparable speed–until you drop it (SLAM the disk down on the floor). That’s where the comparison ends! It can handle over 1,000 G’s, versus 8.
Question… how much is your data worth? You can also take it out of a system at night–providing unequaled security–again, how much is your data worth? In addition, it also has the cheapest overall “cost.”
The Bernoulli “method” really saves money once someone gets a couple of disks. From 350 megabytes on it is the most cost-effective “live” storage available and unlike a tape drive the data is constantly available “at hard drive speed.” Besides, ever priced a fast parallel tape drive lately? A quality 120 meg (show picture) parallel tape unit retails for $1,300. It would be a disservice to sell your customer a 190 ms $1,300 parallel tape drive when a 21 ms Bernoulli is cheaper, faster and can also use a parallel adapter for FAST interchangeability between laptops. Any questions?”
We should never be ashamed or back down when showing a “premium” product. There are two prices associated with most goods, one is the actual dollar price and the other is the cost. For example, while on a trip I pulled into a gas station and purchased a “discount” remake of a favorite album. The tape price was only $4.95, but the “cost” was outrageous! No sooner did I play the tape, one time, when the tape broke. The manufacturer of my $4.95 tape used cheap materials (or in terms of software–poor programming) and I saved $3.00 off the regular “quality manufacturer’s” price. However, my cost for each playing was $4.95! On the other hand, I purchased a tape that was recorded on higher-quality stock and I estimate it lasted well over 100 playings, costing less than eight cents per playing!
In terms of software and hardware, the initial low “price” may seem cheap but the extra amount of learning time and downtime could make the “cost” considerably higher. Remember: You can pay a higher initial price now–and cry once, or you can pay a “cheap” price and cry every time you can’t get it to work!
Review Questions
What is a “price-savings build up?”
Build up one of your current products against its competitors. Take some time to build a good case–it is worth spending the extra time and imagination now than feeling the pain of unnecessary rejection later.
