From the Desk of Lynn Woolf: February 12, 2013

Selling equipment to budget shoppers is always a challenge. How can you provide the best solution to their problems or build relationships when price is the only factor? Here’s a twist on the topic I heard during conversations with several manufacturers at the recent Ag Connect Expo in Kansas City: the budget seller — someone who explains the differences between equipment in terms of dollars, not benefits or features.

One manufacturer shared this anecdote about a budget seller: a customer approached a dealer and asked him to explain the differences between two similar pieces of equipment. Without any discussion about features, reliability, versatility, etc. the salesperson answered, “About $200.”

It’s obvious why some manufacturers with higher priced products are against budget selling. But, why should dealers guard against it, too?

First, there’s nothing wrong with budget selling. Case in point: Wal-Mart and McDonald’s. However, volume makes budget selling possible and there are probably few items that dealers can afford to sell on-the-cheap in the hopes of making it up in volume.

But, here’s the real reason you should guard against it. According to dealerships just like yours, the majority of your customers are not coming to you for price. They are walking in your door so you can help them decide what to buy.

Our annual Dealer Business Trends & Outlook survey has this statistic: More than 70% of dealers say that customers accept their recommendation on a product either most of the time or some of the time. So, that means if you recommend a product based on price, you could get the sale, but you also missed out on revenue and the chance to provide the best solution.

Todd Hansen, owner of Otto Paap Outdoor Power in Franksville, Wis., offers another interesting point about what not to do when selling equipment.

“A lot of manufacturers like to brag about specifications. They think if you can out spec the competition, they’ll get the sale,” he says. Instead, he says customers want to know how the dealership will support them after the sale.

“They’re walking in the door to understand why they should buy from Otto Paap,” says Hansen. Hansen shares other ideas regarding selling and the importance of the retail environment in our “Best Practices” story that appears in this edition of eBrief.

I know the situation isn’t so black-and-white when you’re face-to-face with losing a sale and not meeting monthly sales goals. Just keep in mind that you’re the best at what you do. I bet customers will be willing to pay a fair price for that.