Sell what your customers are buying
In an increasingly crowded and competitive market, it is difficult to get a prospective customer’s
attention, never mind close the sale or get your asking price. That is why so many of us rely on special
offers and discounts even though we know they will reduce our profits. There is an alternative to giving
away margin and that is to stop flogging products and start selling what your customers are buying.
Several years ago, I experienced just how powerful this approach can be. I was chairman of a small
confectionery business that manufactured and retailed hand-made chocolates. One day, the managing director
suggested to me that we put a fudge-maker in one of our stores. He believed that it was a good fit because
fudge is a natural product like chocolate and it would extend our range of products. He said a fudge-maker
would cost us $10,000.
What he was saying made sense to me but the store was small and space at a premium so I asked where
he would put it. He told me the fudge-maker would take up less than half a square metre so it could
be put in a corner. I told him $10,000 was a lot to spend for something that small and expressed my
doubts about his idea. He suggested we meet the salesman and hear what he had to say before making a
decision.
Two weeks later we met the salesman. I have to say that my initial impressions were not all that favourable.
He was very casually dressed and had no papers with him other than a thin folder. After we sat down,
he put his folder on the table and looked me straight in the eye. “Would you like to increase
the revenue in your store by 33%?” he asked. Just like that. Straight into it. No small talk,
no talk about our business, just one question, and that was more of a challenge than anything else.
“I’ll bite,” I said. “And just how do you propose we do that?”
For the next hour and a half he told me exactly how we could do that. “You get one of these,” he
said opening his folder to a picture of a display cabinet. “You don’t want one that looks
like this,” he added showing me another picture, “or like this,” pointing to a third. “It’s
got to look like this one,” he said turning back to the original photo and he explained why.
“Draw me the layout of your shop,” he commanded, sliding a sheet of paper in front of
the managing director. When the drawing was finished, he took his pencil and put a big X on it saying, “This
is where you put the display unit. You don’t put it here or here,” he told us pointing to
two other areas in the store. “It has to go here,” and he told us why.
He then went on to tell us we should make nine different flavours of fudge every day because fewer
flavours would mean people did not have enough choice and more would mean they had too much. The fudge
was to be put on the middle shelf of the display cabinet, not the top or the bottom, because it was
easier for people to see. When people walked into the store, he told us we should ask them which kind
of fudge they would like to try. “Don’t ask them if they would like to try some fudge,” he
instructed. “Ask them which flavour they would like to taste.” Then he told us to give them
only a very thin slice because fudge is very rich and we did not want to satiate their desire before
they had purchased any.
He continued to tell us how to retail fudge for over an hour. He told us how to price the fudge to
achieve a very good margin and assured us that if we followed his instructions, we would have lots of
sales. It was not until the end of our time together that he talked about the features of his fudge-maker
or the ingredients it used and how his system was better than anyone else’s.
What was unique about this experience was that this man sold us what we were buying. He knew that
we did want to buy a fudge machine. He understood that, as businesspeople, we wanted to increase our
profits and he sold us a way to do that.
A few companies understand how to sell what their customers are buying. Merial, an animal healthcare
company, has put together a brilliant brochure for selling drenches to farmers. There are just three
things on the cover: A picture of the face of a cow, a yellow plastic ear tag with “$30” written
on it, and a statement: “Get more out of your cows.” The rest of the brochure explains how
Merial’s products can increase a farmer’s revenue by $30 per cow by improving the productivity
of each animal, because they reduce the harmful effects of parasites. Like the fudge-man, they are selling
profit enhancement. Air New Zealand with its slogan of “Being there is everything” understands
their customers do not want to buy a seat on a plane, they want to buy the opportunity to be at a destination.
But most of us flog products. We do not sell what our customers are buying because we do not understand
that business customers want to buy only one thing, and that is the ability to maintain or increase
their profits. Consumers, on the other hand, are interested only in purchasing ways they can maintain
or improve their lifestyle. If you were to sell these two things, you might find customers more eager
to buy.
Oh yes, we bought the fudge-maker and followed his instructions and we did increase our revenue in
that store by 33%.
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