you need to know the difference between price and cost

It is critical that every textile rental sales rep understands the difference between price and cost when your prospect asks you for your prices. Even seasoned rental sales reps fall into the trap of believing that the key to getting the sale is offering a unit price that is cheaper than their competitors. Nothing could be further from the truth. Learning to differentiate between price and cost and being able to communicate the difference to your prospect will result in more sales at more profitable levels.

The other day I was helping a rep on a major account. The prospect said our price on one of the linen items was much higher than our competitor. Since I was familiar with this competitor’s pricing from collecting invoices and analyzing them, I was able to show the decision maker how they were being charged 5 times the amount of the item than was being delivered. He was shocked and angry! We proceeded to sign the service agreement at our much higher unit price.

Prospects do not understand textile rental companies’ billing. They think they do, but they don’t. Since we deliver the same items every week they associate our billing with other items they “buy” every week. They believe they are being billed for the quantity of items being delivered. Therefore, they think the unit price is what really matters. It is your job to help them understand the difference between price and cost.

Here are a few tips that will help you change the conversation from price to total cost.

  1. Collect several copies of each of your competitors’ invoices
  2. Identify the extra charges (i.e. inventory charges, insurance, delivery charges, replacement charges, fuel charges, etc.)
  3. Black out all information that can identify the customer
  4. Highlight the charges that impact the total cost
  5. Laminate 2-3 examples of each competitor’s invoices that illustrate the difference between cost and price and keep them in your presentation binder
  6. Utilize the laminated invoices for a specific textile rental company when you are competing against them to educate your prospect
  7. Perform a cost comparison to demonstrate that your total cost is less expensive than your competitor

Don’t be afraid of your prices. Use your head to change the conversation from price to cost. The result is you will sign more business at better prices.

Great Selling!

RentalSalesRep.com is a Remote Sales Management organization that provides digital sales training and sales support to the Textile Rental Industry. To learn more visit RentalSalesRep.com, or follow them on Twitter @Rental_SalesRep or Facebook at facebook.com/rentalsalesrep. You can contact them by email at Sales(at)RentalSalesRep.com.
This article originally appeared in the Rental Sales Rep blog and was chosen because the subject is so critical.