Today, a popular phrase that people use as they shop for value is “sticker shock.” It comes from the car business, where cars include a window sticker showing the product’s features and pricing. It’s pretty easy these days to walk up to a car you think would look good in your driveway and say, “Wow! That’s expensive!” That reaction is sticker shock.
Recently I was reviewing my firm’s inventory and ran across a 49" vanity top that cost us $427. My first reaction was, “Wow! That’s expensive.” Then I thought for a moment about what potential customers would think when we price that same vanity at $743. Would they experience their own sticker shock?
ELIMINATING THE SHOCK
How as designers/salespeople can we remove the shock value for customers when confronted with seemingly high prices? Initially, it’s key that you use the right words when speaking with a prospect. Those words vary according to the prospect, so you need to be able to read each prospect’s reactions and choose your words carefully.
Some will actually react in a positive way to the words “costs a lot of money,” “it’s premium” or “expensive.” However, these are often the prospects who want to repeat those words to friends. I find that most react to these words in a negative way.
So, how do you talk about price? My philosophy is rather simple – find out what customers need, and then find out how badly they need it. For example, that $3 bottle of water at the airport might seem expensive, but if you were stranded in the desert with the hot sun bearing down on you, what would you be willing to pay for that same water? The water is the same, but the need has changed.
As designers/salespeople, once we’ve identified the need, we can make prospects thirsty for more by offering improved benefits that increase the amount of the investment. When properly done, prospects lose their sense of sticker shock because they see value.
Don’t assume that customers understand all of your products and services and how they create value. You need to explain that, for every dollar invested, they gain benefits for themselves and for their families. When you see customers’ eyes light up about the benefits they’ll gain through ownership, then you know the value of the products is registering with them.
You can also avoid customer sticker shock by breaking the investment into smaller chunks. When dealing with the price of a car, customers cope with sticker shock by breaking the cost into more affordable monthly amounts. In our industry, prospects always look at the big number, which can be scary. With a monthly payment table at hand, you may be able to prove monthly affordability. If that doesn’t work, ask what size monthly payment would work.
Designers/salespeople must also guard against their own sensitivity to what they consider expensive. It’s sometimes hard for us to sell what we cannot afford. Keep your focus on prospects’ needs, wants, desires and expectations, and how happy they’ll be when you fulfill them, regardless of the investment required.
I told a story years ago that bears repeating here. My firm had a display of a premium brand of cabinets at the Iowa State Fair. Above the display was our company name, as well as a large logo of the manufacturer’s name. It was a hot August day, and I was doing my best in a non-air-conditioned building to demonstrate the features of the cabinets’ storage to the throng of people going past.
A man stopped in front of the display, squared his stance with me, grabbed the suspenders on his bib overalls, rocked back on his heels and in a loud voice proclaimed, “Quaker Maid cabinets are the cheapest cabinets ever built.”
He knew his loud statement would get my attention. So, being as conditioned as I am about how to overcome customers’ sticker shock and witnessing how, in the end, their appreciation of the products’ benefits increases over time, I immediately asked, “Sir, did you have a problem with this product?”
His reply was, “No. When I put them in 25 years ago, they were the most expensive cabinets I could buy, and today they work and look just as good as the day they were installed. That makes them the cheapest cabinets ever built.”
This man clearly also knew – and understood – the benefits of product longevity.
Think about this example the next time you see sticker shock in the eyes of your prospect.
If we can’t provide proof that the value of the investment will be there in the years to come, then we are not doing our job. If we don’t understand that the customer often has different values than us, then we will not be in a position to discover and fulfill their needs. Understanding the customer and providing the best solutions for their project will fade sticker shock.
When I am traveling to meetings around the country, I take the opportunity to visit other showrooms – sometimes incognito. In a prominent chain store, I once experienced the ultimate in sticker shock. The salesperson there immediately prejudged me as a person who either couldn’t afford or wouldn’t have the right value scale to own the solid surface top I was considering.
My question to the salesperson was, “What is this product?” His reply was, “It is a new product and very expensive. Once you hear the price, I doubt if you will want to buy it.”
The problem here is this salesperson was not willing to find out about my needs and explain to me why I would enjoy owning it. In essence, he created sticker shock.
In fact, as I wrote this column, one of my designers came to me with a pricing question. The customers with whom she was working had another quote that was $2,750 less than our product, and wanted her to go to a higher authority to see if the price could be reduced.
I let her deliver the answer – “No” – and then went out on the floor to let the customers know she did come to my office with the request to reduce the cost. I explained that our pricing policy includes the cost of the product, as well as the overhead and the proper profit. I then expressed our interest in gaining their business, and explained exactly how important our designer and firm would be in the success of their project.
Will we get the sale? As of this writing I don’t know, but much of what I have put into this article will be exercised in trying to earn it at our price – without inducing sticker shock.