Apples to Apples and Pricing

By Guest Author Linda Bishop

[In this series, Linda considers how salespeople can adapt their approach to thrive even in a tough economy. Yesterday’s post discussed how buyers assess price and value, and today’s final installment digs deeper into what buyers might be thinking at the time of a purchase. You can find out more in Linda’s book, “Selling in Tough Times”.]

When we’re selling in a down market, it’s important to recognize that there are always substitutes for our product or service. Businesses and consumers examine a wider range of substitutes when they’re forced to make trade-offs. To put it another way, they compare one apple to another.

This excerpt from “Selling in Tough Times,” uses eleven apples to apples comparisons as a way to get inside the buyer’s head and understand what they’re thinking.

The Effect of Price When Buyers Compare Apples to Apples

Amy shops at the local farmer’s market. She’s hungry and wants to buy an apple. Analyze how price comes into play in each of the following situations.

She spots two bins filled with apples. The sign above the bin on Amy’s left says, “Apples 50¢ each.” The sign above the right bin says, “Apples 60¢ each.”

→Amy examines the two bins. All the apples are red and approximately the same size. Amy buys the cheaper apple. Why?

She buys the cheaper apple because the seller gave her no apparent reason to choose one over the other.

→Amy examines the apples. All of them are red but the 60¢ apples are much bigger. Amy buys the 60¢ apple. Why?

Amy pays more to get more. The benefit of having a bigger apple outweighs the increase in cost.

→Amy examines the apples. All of them are red, but the 60¢ apples are much bigger. Amy buys the 50¢ apple. Why?

Amy is hungry, but she’s not starving. She doesn’t need a bigger apple. She pays less to get less.

→Amy examines the apples. All of them are red. She doesn’t like red apples. “Do you have any green apples?” she asks the vendor. He points at a bin filled with green apples. They are 65¢ each and all are smaller than the red apples. Amy buys a green apple. Why?

Amy pays more to get her preferred color of apples. Size doesn’t matter because it’s not a benefit she cares about.

→Amy asks, “Do you have any green apples?” She is shown a bin filled with green apples. They are 65¢ each and smaller than the red apples. She walks away without buying an apple. Why?

Amy doesn’t think she should have to pay more for a green apple, particularly when it’s smaller. To her, it’s not worth the money.

→Amy asks, “Do you have any green apples?” The vendor says, “No, but I have a great deal on pineapples. Normally they cost three dollars, but today, I’ll let you have one for a dollar.” Amy says, “No thanks.” Why?

Amy’s problem is her immediate hunger. A pineapple won’t solve that, even when it’s a good deal.

→Amy asks, “Do you have any green apples?” The vendor says, “No, but I have a great deal on pineapples. Normally they cost three dollars, but today, I’ll let you have one for a dollar.” Amy says, “I’ll take one.” Why?

The pineapple doesn’t solve Amy’s hunger problem, but at that price it’s a bargain she can’t pass up.

→Amy is hungry, but she only has $5.00 to spend. The cheapest apple uses up 10% of her snack budget. She decides not to buy an apple at all and keep shopping. Why?

Amy balances trade-offs and decides an apple doesn’t have enough value to justify the cost. If she had $20 to spend, she would make a different decision.

→Amy has an apple in hand and is ready to make her purchase. She asks the vendor a question. He answers rudely. She puts the apple back in the bin and leaves without buying. Why?

Amy knows there are other apple-sellers in the world. When she’s spending money, she expects to be treated well.

→Amy buys the 60¢ apple. She talks to the vendor named Bob. Amy confides that she doesn’t like her current job and has always dreamed of running a fruit stand. Bob offers to sell Amy his stand for the bargain price of $5,000.00. Amy writes Bob a check on the spot and immediately texts her boss to inform him she quits. Why?

Amy thought she only needed an apple. Bob uncovered a deeper source of pain and offered a solution. Amy, the sole decision-maker, compared to value to price, thought she was getting a good deal, and made the purchase.

→Amy buys the more expensive apple. She wants to buy the fruit stand, but doesn’t. Why?

Five thousand dollars is a lot of money and more than she intended to spend. She needs to think about the purchase and its implications before she buys. Perhaps she needs to consult with other affected parties, like her husband who has a say in how money is spent.

Think through your situation. Recognize there are always substitutes for your product. Some substitutes cost more and offer different benefits. Some substitutes cost less and do less.

In good times and bad, price influences buyers. In tough times, the best way to combat lower prices is by becoming an expert in the value of your apple, and knowing how to explain that value to customers.