Sales 101: Put a Price on Free Stuff

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Do you throw in “free stuff” with the goods or services that you sell? Everybody likes to get something for nothing, and offering some free value added products or services may be an effective marketing strategy. But be careful, if you undervalue the free value adds, your customer probably will too.

Lets first talk about why free value adds may be a good thing. For example, suppose you sell a device that needs to be installed. You might include installation for “free”. This could be a real advantage for the customer, since they may not have the time or expertise to do the install on their own. Sold! Now they write up a purchase requisition, and you are off to your next call. In a couple of week you notice that purchasing never sent you a P.O. and you follow up to find out that you lost the order to a competitor for a couple of bucks!

So what happened? Purchasing or maybe your customer’s manager who had to sign off on the order didn’t recognize the worth of the value added service, and so didn’t take it into account when they awarded the P.O.

What to do about this? Always put a price on value added services. In this example, you could have quoted:

Widget         $1000.00
Installation    $250.00
Discount        $250.00
Total          $1000.00

Or you could have included a comment “Installation, $250.00 value, included at no charge.” You can never be to careful about this. If you undervalue these value added extras, so will your customer. Make sure you put a realistic value on all these services: installation, calibration, training, crating, delivery, inspection and approvals, manuals, documentation, and extended warranty. In fact, anything that you have to pay for, or one of your staff has to take time to do, has a value. Make sure that your customer, their manager and their buyer recognize the value and take it into consideration when buying.

Do you want to turn value added services into more sales and higher margin orders? Can we help you and your sales staff effectively present the worth of value added services? We can offer you a $250.00 on site needs assessment for free if you mention this blog. Get it?