What was the last major purchase you made? A car? A computer? And what—if anything—was it about the sales process that made you feel as though the experience was a success and you’d purchase from the salesperson again? Chances are, your satisfaction ended up coming less from getting the lowest price and more from feeling as though your purchase was of the highest value. Those are, surprisingly, two very different things.
Few things are as satisfying to a salesperson than winning a sale—the thrill of the signed contract, of facing off with competitors and coming out on top. Sales that are won through bid wars where you walk away with the sale simply because you had the lowest price aren’t nearly as satisfying—or as lucrative.
Why it’s Not About Price
Here’s the difference between winning on price versus winning on value: winning on value means you successfully convinced your customer that your product or solution was the best, regardless of price. If you’ve “won” on price, all you’ve managed to convince them of is that you were the most willing to slash your margins to give them the lowest price. It should come then as no surprise that underbidding your competitors and winning on price alone doesn’t give a salesperson quite the same thrill.
Consider, too, that pricing wins aren’t long-term wins. Sure, you have the business now, but you undercut everyone else to get it; who’s to say that someone else won’t undercut you to steal the business away? Customers who are only buying based on price have no loyalty because they have no reason to be loyal, or at least no reason to be loyal to anything other than their own checkbooks.
Surprisingly enough, your higher-profit customers will also tend to be your happiest customers. It sounds counterintuitive until you consider that the higher-profit customer is one hundred percent sold on your product or service. They’re not buying based on price; they’re purchasing based on quality, setting the tone for building a relationship to create longevity. Another company could come to them with lower pricing down the road, but so long as they remain convinced (and proven) of your superior product or service, and entrenched in relationships with their sales reps and account managers, they’re not going to leave.
How Do I Know When I’m Undercutting?
Sometimes, you may end up winning a sale on pricing alone, and that’s okay, but don’t make that your go-to sales tactic. Understanding accurate cost information on your product is one way to ensure your company maintains profitable sales. That is accomplished through enterprise resource planning (ERP) software.
How can ERP software do that?
- Forecasting: By tracking a product through every step of its production and fulfillment processes, ERPs can help businesses better understand the lifecycle and demand of a product to make accurate forecasts and purchase materials accordingly. No more spending money on resources you don’t need or can’t use in time.
- Integrated Information: Break your data out of its silos and merge it into a single location. Integrating your ERP system with other platforms such as CR will keep all your data consistent, unique, and accurate. This means that everyone from salespeople to accounting to purchasing knows the details about every customer, order, and inventory to maintain appropriate inventory or even offer pricing promotions on products that need to move. (That might be a good time to “win” on price!) With access to real-time information, your organization will be able to respond more quickly to changes and capitalize on new opportunities. This means you might just win that next sale on value.
- Reduced Costs: Because of the information generated and shared in the ERP, costs are reduced across the company, from inventory to manufacturing to materials to transportation and even back office costs. That lets you pass savings on to your customers without needing to resort to lowballing.
Win Big with ERPs from ASI
Accounting Systems Incorporated (ASI) has more than 30 years’ experience implementing ERP systems, helping small to mid-sized companies centralize data to maintain profitable sales. We believe in value and getting the customer what they want the first time, and we want to empower your business to do the same with the right software solutions. To find out more about how the right ERP can help you win sales on value, contact us or call us at 803-252-6154.