You must know your prospect and what’s going on in their head while you are presenting to them. Your prospects are going to decide who they buy from using one of three methods: Relationships, Differentiation, or Price. Let’s go through them to give you the best chances of the decisions going in your favor.
Starting with relationships, a prospect may decide to buy from you based on a relationship he or she has with someone at your organization. This is where you get your repeat buyers. With each purchase, it becomes easier and more reasonable to make the next purchase from the same organization. Typically, people are creatures of habit and the smallest act of kindness can create a bond that brings a customer back repeatedly. These relationships are your 1st degree connections. Your prospect can also choose your company based on a relationship they have with someone else, who in turn has had some type of relationship with your organization. These 2nddegree connections are what you call referrals. Referrals are highly effective because bonds are created relatively fast.
All the necessary goodwill, positive experiences, and admiration transfer from the previous relationship. Finally, your 3rd degree connections are recommendations people take from complete strangers like review sites or connections on social media they don’t know personally. The experiences and reviews of others very easily persuade people, even if they are written anonymously online. It is important to understand how all these relationships are influencing your buyer’s behavior, because they often look to do business with those they’ve already done business with, or with those who others have tried, before choosing to be the guinea pig themselves. This is the reason social proof has such an impact on our decisions.
So this tells us how we should operate going forward. Our goal is to build a client machine that’s constantly generating new relationships. The more client relationships you have, the more your business can grow exponentially on the back end. The lifetime value of a new client is worth substantially more than that first transaction. It will be easier for your clients to purchase additional products or services from you then to find someone else with a similar offering. Knowing this, we want to systematically generate new relationships, and maximize those relationships by continuously recommending additional purchases.
Price and Differentiation
We’ll discuss price and differentiation together because they go hand and hand. Very simply, if a prospect has no idea what makes two vendors different then the only way they know how to decide is based on price. Since the two options are exactly the same, they’ll always go with the lower priced option because that provides the most benefit. This is a dangerous game to play because very rarely do companies do well in business by being the lowest priced. In fact, except for Walmart, I don’t know any business that survives this deadly game. Usually, it would benefit you more to increase prices because the amount of the increase goes straight to your bottom line and most of the time this increase doesn’t affect sales (depending on the size of the increase).
George Athan Choosing to lower prices as a differentiator is a race to the bottom because each reduction comes right off your bottom line. For those that think discounting creates a good incentive to drive sales, the math just does not work out. The increase in sales is rarely ever enough to compensate for the volume that would be required to bring in the same amount of profit.
George Athan Joined: September 13th, 2018 Articles Posted: 10
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