If your items aren’t selling, then you might have a bad pricing
strategy. There as many pricing strategies in the world as there
are buyers - if you look at two businesses selling the same
thing, often the only difference you’ll be able to find between
them is pricing.
The ‘Few Dollars More’ Strategy.
Here’s something you might not have thought of. If you set your
auction’s starting price to what you would usually charge for
Buy it Now, while setting the Buy it Now price a few dollars
above, you can make a profit by setting off an interesting
psychological reaction in the buyer’s mind.
Here’s what they’ll think. They want the item, but why should
they bother bidding for it? After all, they could use Buy it Now
for just a few dollars more, and be sure of getting it! Doing
things this way makes the value of the Buy it Now option extra
clear to the buyer, and makes them more willing to pay extra for
the privilege.
The ‘One Dollar Less’ Strategy.
This is simple, but requires you to keep an eagle eye on your
competition. As soon as they start a Buy it Now auction for an
item you stock, start an auction for one of those items
yourself. Match the title closely, but price your item one
dollar less than theirs. This will mean that your auctions will
sit together in the search results, and who’s going to see both
and go for the one that’s a dollar more expensive?
The ‘Free Shipping’ Strategy.
Buyers really hate paying for shipping. With Buy it Now, you
might find it easier to incorporate the shipping cost into the
main price of the item, and then write “free shipping” in the
auction’s title. You’d be surprised how many buyers would prefer
to pay one price including shipping for the auction, instead of
having shipping added on at the checkout. Again, this is
psychological: they pay the same at the end, but it doesn’t feel
like they’ve paid an unnecessary ‘extra’ cost for Internet
shopping.
The ‘Go for It’ Strategy.
If you’d like a slightly more risky strategy, try this. List
your item for the maximum duration (ten days), starting the
listing on a Thursday so it goes across two weekends and
finishes on a Sunday. Set the starting price to the minimum (one
cent).
What you’re trying to do here is give bidders as long as
possible to discover your auction, so that they push the price
up themselves. Pay for a few upgrades like bold and highlight,
to give them a helping hand. If you do this right, you can make
a much bigger profit than you would have with any Buy it Now
price, especially with a medium or high value item.
Over the last couple of months, I’ve been working on a major
project at my day job. I have decided that it’s time to replace
our backup system with what’s called an enterprise backup
solution. This means we want to be able to manage all of our
backups from a central location.
We are getting near the end of the bidding process for this
project. It’s been very interesting what with the recession and
all. A year ago, when I asked for a price reduction on anything
I was often laughed at or given just a token discount of a
couple percent. Now I am getting deep cuts of thirty to fifty
percent! One thing that I am learning is that while recessions
are not good things, they do give the buyer more of an advantage
than in a strong economy.
Where was I? Oh yes, I’ve been gathering information, bids,
competitive data and lots of other things that I need to make a
decision. You see, this is not a cheap solution and the problem
is complex. Thus, I want to be sure that I can honestly sell the
whole thing to my boss. When he asks me questions I want to be
able to answer immediately.
The salespeople are getting very frustrated with this process.
They are, quite frankly, not used to selling. My staff and I
have noticed that salespeople in the computer business are,
well, fat, dumb and lazy. Even though we are talking about a
quarter of a million dollar project, the people just don’t want
to do any work.
Finally one of the salespeople came right out and told me he was
very frustrated. He did not understand why I had not yet
purchased his product. He had given me price quotes, a
competitive analysis and a product specification. In his mind,
he had done everything he needed to do.
I sat back in my chair for a minute, thinking about his
question. It didn’t take me long to formulate my thoughts.
“Tim”, I said, “What I want is for you to sell me your product.”
Tim was very surprised by this answer. He explained that he
thought he was already doing that.
“No Tim”, I replied, “what you are doing is giving me canned
presentations, printing prepared specifications and comparisons
off your web site, and pulling numbers from your price sheet.
You are not selling me anything.”
Tim honestly didn’t understand - what was wrong with his
approach?
Here’s what I want from a salesperson. Listen to me and my
staff. Really listen. Don’t be thinking about the sale, about
your wife or your commission. No, listen to me. I have patiently
explained what problems we are trying to resolve, and I have
asked my staff to explain what they want. We are very good
communicators so you should be understanding what we are trying
to say.
Now if you’ve been listening so you should know exactly how to
solve our problems. Go back to your office, sit down at your
desk and turn off your phone. Type on the computer exactly how
your product will solve the problems and concerns that me and my
staff have presented to you.
Don’t tell me why people want your product and don’t tell me
about your product. Tell me how your product solves the problems
that we have explained to you.
Yes, I need to see the specifications, but you need to explain
why your product is better at meeting our requirements than
anyone else. You say you’ve listened, okay, then prove it.
We want an enterprise backup package. Why? Tell me what problem
we are trying to solve, then tell me how your product solves
that problem. Is it going to save us time and money? Is it going
to improve reliability? Is your product going to make it easier
to restore files? What makes your product shine?
What the salespeople have been doing is telling me to buy their
products. They have not been selling. I already know all about
their products, their companies and their services. I don’t need
them to tell me this information again, especially since it
already exists on their very own web sites.
No, what I need to know is how are our problems and requirements
are met by their products.
Let me give you an example. A few months ago I went into the
Saturn dealer to buy a new car. The salesperson came over and
greeted me personally, then asked me what I was looking for.
As I explained my requirements she asked lots of questions. What
kind of financing was I looking for? What color? Did I have
kids? A wife? Was I looking for something conservative or
flashy? One thing she found out right away is I have a big
concern about maintenance costs. Another important issue is
comfort. On the other hand, the look of the car is not all that
critical. This question and answer period went on for over an
hour. It was pleasant and not stressful by any means - in fact,
it was great just telling the gal what I wanted from a car.
Now it was her turn. She spent the next hour showing me cars
which met the specifications and qualifications that I had given
her. She showed me under the hood, and explained how Saturn cars
are easier to maintain than others. She showed me how the car is
dent-proof by hitting a sample automobile with a hammer.
She didn’t spend any time at all on the look of the car - she
knew (because she listened to me) that this is not very
important to me. Instead, she spent the time telling me how a
particular Saturn model met my needs - the needs that I had just
been telling her.
Needless to say, she got the sale.
What the computer salespeople have been doing is showing me
pictures of computers, sending me specifications and explaining
to me how wonderful their products are.
What they should have been doing is listening, then responding.
Instead, they were simply presenting canned presentations. Much
like the Toyota salesperson that I visited only thirty minutes
before the Saturn dealer. Needless to say, the Toyota dealer
didn’t get the sale.
So what’s the moral of this story? Computer salespeople need to
get to work. The fat, lazy days of the last ten years are gone -
we are entering a recession folks. Recessions are buyers
markets. You’ve had it easy, now roll up your sleeves and really
sell.
The other lesson is equally simple - listen. Once you’ve
listened, ask some questions, then listen some more. Do this
until there is nothing else to listen to. NOW, after listening,
tell me which of your products best solves those requirements
that we have just told you and why.
That’s what I want from salespeople.
‘Nuff said.