ProSales this month focuses on introducing new products to the market. Here is how I recommend you think about selling new products: Avoid hyping features and benefits. Rather than sell what the product is, sell what the product does.
Nearly 20 years ago, hard surfaces such as granite were starting to challenge laminates in the marketplace. Think back to then and imagine a scenario in which Alice, the kitchen design specialist, is making a proposal to her builder client.
The homes being built by Alice's client weren't moving. She concluded he had a flaw in his product design: the kitchen counter. So instead of putting laminate in her proposal, Alice priced a granite kitchen countertop instead.
Her client was aghast. "Add another $8,000 to the price of my houses–are you nuts?" he screamed. "This will put me under!"
Alice calmly replied: "I am not suggesting you mark up your homes by the mere cost of the product. That would be ridiculous. Instead, you should mark up the cost of your homes by $12,000. What self-respecting businessman would neglect to add a profit to the products he sells?"
That even higher price stunned the client, but Alice had prepared well. "Look," she said. "This is a new evolution in the market. Home buyers want hard surfaces in the kitchen. I sell to your competition, and I can tell you with certainty that you are correct when you say you have a sales problem. You're caught in between. You build a nice home, but it's not nice enough to be a step-up home, and it's too fancy to be a starter.
"You have so many nice features–maple trim, recessed lighting in the raised dining room ceiling, high-end windows," she continued. "But you put this [expletive deleted] laminated countertop in the kitchen and your prospects aren't buying. So, yes, if you don't change I will lose your business, either when you fire me or when you go out of business. I am here to help. Put the granite in the kitchen. Design your products to be competitive with the step-up market. You won't even have to give me credit for the extra $1,000 in finance I'll create for you."
"Ok," the builder said. "Now I am really lost. What $1,000?"
"You have about $200,000 in this home and move your homes every 60 days in a market that is turning in 30 days," Alice replied. "When you make the change to granite, you'll turn them a month faster. The way I see it, that's $12,000 a year in interest. Borrowed at 6%, that comes to about a thousand bucks I'm saving you."
If you were the builder, what would you have done? You might have thrown Alice out–or you might have listened, because she was right. If you had been building 10 houses per year, she might be proposing a package that increased your profits by $50,000. She was introducing a new product to the market in the proper manner–by not selling what it is, and instead selling what it does.
Note that this sales pitch occurred without any mention of the product's features and benefits. She didn't talk about color or durability. She didn't demonstrate how a hot plate could be placed on the counter without fear of leaving a mark. She never mentioned the ease of maintenance or even the long-term durability compared to laminates. She simply offered a business proposition.
When you introduce a new product to the market, forget the features and benefits. Sell the profits and you'll reap more success.
Rick Davis is president of Building Leaders Inc., an LBM advisory firm specializing in sales management training. He is an international speaker and author of Strategic Sales in the Building Industry, a BuilderBook publication. 773.769.4409. E-mail: [email protected]