by: Rick Pontz

A couple of years ago a company hired us because they were struggling with selling their lawn and garden products against a competitor who always under priced them. Our client was losing their business based on pricing and they couldn't turn it around. We spent a half day with their sales and marketing team presenting them with programs and processes to compete against a low priced competitor. At the end of the training I asked the team if they thought they could now compete against their low priced competitor. About 70% of the team said they still considered "price" the main issue of why they couldn't sell their products. That meant after over 4 hours of training the vast majority of the sales team believed selling price would make or break a sale.

I realized then my big mistake was I spent the entire half day giving them the tools they needed to get their business back and I should have spent the time re-educating the team to understand and believe in their products value, their company's value and their value as sales representatives of their company. I should have spent my time showing how they were making the common mistake of believing their customers were actually making buying decisions based on price. Once they had an understanding and confidence of what they were offering their customers and the real value of what they were selling then I could have given them the tools to demonstrate that value.

One of the stickiest issues for most suppliers of lawn and garden products is setting just the right price for their products. It's not a process to be taken lightly, and it can mean the difference between being in the black and being in the red at the end of your fiscal year.

Under pricing lawn and garden products is a universal problem when it comes to that process. It's typically generated by the fear that you won't be able to sell anything if the price is too high. But that won't happen if you do your homework and research properly.

Here are a few areas I should have discussed at the half day "Price Doesn't Matter" meeting:

Here's the truth: customers will shop on price if they have no other way of differentiating you from your competition. Which means if you believe your customers make their decisions based on price, it's because you have trained them to do so by NOT setting yourself apart from the competition. Yes, it's your fault - not theirs

You can't control your competitor's pricing. They can quote whatever price they want. It doesn't matter whether you know they won't make a profit at the pricing their quoting or they will never be able to fulfill the commitments they are making at the pricing they are quoting. It doesn't matter that they are going to lose money. You can't do anything about their pricing. Buyers will eventually figure that out on their own over time. Reducing your price doesn't address their profitability, their promises, or that they can't deliver. You can only create compelling, differentiated value to what you are selling.

You can't control whether or not your competitor makes stuff up. It doesn't matter that your competitor will make stuff up about their product(s) or your product(s) or forget to mention a few facts about important things like quality, consistency, consumer satisfaction, delivery accuracy or other expectations of the prospect.

Your focus belongs on the things that you control, and your competitor isn't something that you control.

Solve a problem, get the sale. What do your customers pay for?  Believe it or not, it isn't the lawn and garden product you are selling or the price you are selling your products at. What your prospects pay for is a solution to a particular struggle or problem they are dealing with at the time. It may be margins, or turns, or foot traffic, or their brand image, or inventory logistics, or consumer internet orders.

If you can find the REAL problem and effectively solve it you can pretty much charge what you want (within reason). Think your business is different?  Think yours is more competitive or more of a commodity? Think again - I bought a new LG3 Smart Phone - a commodity that I could have purchased at 12 different places within 5 miles of my house or I could have ordered it off the internet. I went into 3 separate stores and spent at least a half hour at each location. I bought it from a Verizon store 3 miles from my house and paid 50% more for it than I could have from a half a dozen stores that were closer to me. Why?

I paid 50% more for the same phone for the convenience of not having to download, transfer data and update my new phone and the store I bought it from told me to drop by every week at my convenience and they would train me how to use it.

The other stores I went to didn't do anything wrong, they kept showing me their special discount programs, rebates, and free accessories. At the same time they didn't do anything right. They never asked me about why I was buying a new phone or how I planned to use it or why it took me three long years to upgrade to a new phone or what I was struggling with on my old phone. The store I bought it from asked me all those questions, slowly and patiently walked me through my decision process and got the order. They provided me with solutions and I didn't mind paying extra for it.

Present value not price.  Retailers and distributors are always looking for a good value not necessarily the lowest price.  It's up to you to know what the product's overall value is and how to share that information with your customers.  It is as important to find out what your customer is looking for, since value can be perceived differently by everyone.  We always present the price of a product as the very last thing we talk about. We spend 90% of our time with a buyer presenting value and support and to make sure our products and programs match the accounts needs, solves their problems and will meet their expectations before we talk about price.

Know why you have a competitive edge.  Knowing what your account wants and needs is important, but it's also important to know what your competitors are offering.  It's not uncommon for an account to say, "But XX Super Garden has this same product for a lower price."  When a buyer makes that kind of statement it means that is when your job starts. Such a statement can make or break the sale, depending on how prepared you are to respond.  Your account may not realize that the competitor does not offer re-orders in season, or only ships in pallet quantities, or will not attend the accounts' trade show, provides no in-store service or has no advertising support, doesn't have a returns goods policy, offers an inferior guarantee or that its product is made from lower quality materials and has a higher defective rate.  Educate yourself about not only your product line, but also how your company competes with similar products, prices and most importantly, product support programs and the ability to meet the accounts expectations.

Eliminate risk. Retailers and distributors are more risk adverse than ever before. No one is willing to take a chance on changing suppliers or buying new products. You want to offer the account the peace of mind that they are making the right decision even if your prices are a little higher than your competitors. Solving their problem and eliminating their risk has great financial value to your accounts and prospects. Using your value to get the sale is both an art and a science. The better you get at it, the more your business will benefit and the more price won't matter!