Why buyers hate losing

Why buyers hate losing

Transcript

Today, I’m going to share a secret with you. It’s why buyers hate losing so much.

In earlier podcasts I talked about the buyer’s perspective and I still believe it’s crucial to understand this to become better at sales. I mean, you need to know who you are selling to, right?

So, today, I’m going to share a short anecdote with you that will clarify the pain buyers go through every single day in their jobs.

Imagine, you just bought a brand-new car for $50.000 and as you park your car on the driveway, you proudly look around to see who notices your car. You look to the right and you see your neighbour standing next to an identical brand-new car, basically it’s exactly the same as yours. You’re quite surprised and decide to walk over for a conversation. As you’re chatting away, you boldly ask the question: “so, neighbour, how much did you pay for the car?”. You then hear the words: $45.000 and how about you?”

Now, honestly, how would you feel? Well, I know it would make me extremely unhappy knowing there was a better deal to be had. This is the exact pain buyers want to avoid at all cost. They really hate paying too much, but here’s the thing: in real life it’s hard to get this information from someone else in the exact same situation. Therefore, you will almost never know whether you actually paid too much.

So, the trick is to give buyers the feeling they got to a great deal, because they have no way of knowing whether it was a great deal or not.

Let me go into slightly more detail here. For a buyer there are 2 ways of finding out what the price should be for the product or service they buy:

  1. First, you have the “cost-plus method”. This means all individual cost elements are added and a margin is put on top. Realistically, buyers will never truly know all cost elements of the product or service they buy since sellers don’t like to give full transparency on this. In personal life it works the same; do you know how much a pair of jeans truly costs?
  2. Second option is “assessing the market”. This means you’re trying to find out what the market price is for a specific product or service, for example through tendering. This is basically the next best option versus cost-plus method. In personal life, this means you’ll search the internet to see where they are selling this particular pair of jeans at the best possible price.

The majority of buyers work with option 2 “assessing the market”. This means they are always looking for alternative suppliers so they can benchmark or tender your product or service. They do this to give themselves the great feeling of getting the best deal.

So, 2 tips that will help you here from a sales perspective:

  1. Make sure your product or service is unique so you cannot be tendered and buyers have to work with you. They have no other option.
  2. Always give your buyer the feeling they got the best deal. They need it.

Happy negotiations everyone!