The ability to explain the concept of cost of ownership is a skill that every successful sales consultant needs. It has been often said that people buy with emotion but pay with logic. Helping a client make a positive buying decision means that we sometimes need to walk them through a logical cost of ownership discussion to:
- Resolve a price objection
- Make them comfortable paying more for a better product or
- Help the procrastinator make a decision to buy now
Last month we looked at "Resolve a price objection". Now let's look at the second one: Make them comfortable paying more for a better product.
The first thing we have to do is get our own head screwed on right when it comes to price. The lowest price is not always the best choice.
If it were, we would all drink the cheapest wine and drive 20 year old vehicles. We don't and neither do our customers.
When a client is comparing your higher priced choice to a lower priced competitor brand we have to engage them in a value rather than price comparison.
This value discussion may use one or all of the following components:
1. Your choice is more expensive because it is higher quality and has more or better features. Having more or better features only works if you have done a great job in the interview and understand their lifestyle, needs, and situation well. Only then can you choose which "better or more features" to focus on - the ones they will miss the most by choosing the lower price product!
2. Your choice has a track record for higher resale value - the difference between what you pay now and what it is worth a few years down the road is the true cost of ownership. The quality product will always be in higher demand as a used vehicle and this keeps its resale value stronger than the product with the lower initial cost. Help them see the difference in the two choices between cost to acquire and future value.
3. Your monthly payment has a savings component. Separate the anticipated future value by asking them how long they plan to keep the car and what they think it might be worth at that future date. That future value divided by the number of months is the equity they build every month. It's like a forced savings account. The true cost of ownership is the payment minus the monthly equity. It's pretty safe because people tend to overstate what they think a future value will be. Suggest that your choice offers the way to build the highest equity.
As always, after you justify you must ask for a decision again. Next month we'll look at the cost of ownership approach to help the procrastinator make a decision to buy now.