Commitment vs Price
This little piece is something I wrote awhile back and was designed for sales people but it will definitly provide value to everyone in general. Read below and see if this might help aid you in feeling better when shopping your next large investment
We know that when we get an objection based on price, often, it is not a true price objection. Usually it is because they do not have enough information, the perceived value doesn’t exceed cost, or some other underlining reason. I have learned that sometimes the price objection is simply just however. They do like the product, they do like the features, and they do believe they would enjoy the product now and years to come. With all reasons pointing to buy why would they insist on stopping the sell? Understand the money isn’t what people are afraid of, even if that’s what they believe. People are afraid of the commitment.
Therefore, agreeing to marriage proposals, having children, investing hard earned money, and even a weekly grocery trip feels like a big decision. How about which route to take to a dinner out during rush hour? The wrong path taken could be the difference between a 20 minute and a 40-minute endeavor, and this trip becomes a bigger decision, right?
Back when I was in the car business I formulated this concept, not only with customers, but with myself. Just like anyone else I am no exception to the rule and I learned that when the commitment isn’t the focal point of the deal the people tend to buy. So how do you remove the commitment then? The reality is you can’t, this is a guarantee that you will pay the lender the agreed upon amount for the duration of the loan. Even if you can’t remove the “commitment factor” you sure can make them feel better about it. The question is how?
I decided to start with the money. Now, I have never agreed to a large chunk of money before like customers do when they sign a car deal so to understand I had to break down a 60-month car note into much smaller pieces. First, I start with the amount per year, then per month, and finally per day and here’s what I discovered.
Toyota Camry (after TTL) $25,240
60mo @ 4.5 Interest $470.55
Per day (31 day month) $15.18
As you can see, the price per day becomes $15.18. Now, that doesn’t seem like much and I tend to spend more than this on things I don’t need daily. To take it one step further I wrote out a few things I buy just to get my day started.
Pack of cigarettes $6.57
Energy Drink $2.89
Muscle Milk $4.32
Per day $13.78
Per year $5,015.92
Per 60mo $25,079
Already I am spending close to what that Toyota Camry would cost me had I bought it. Looking back at what I spent comes across as a “big deal” but it hasn’t prevented me from buying. So why am I okay with this and not a car deal? The difference is a sales person didn’t sit me down, show me a $25,079, and guarantee me a pack of cigarettes with an energy drink and Muscle Milk every day for the next 5 years. And if he had I would have done what most customers would do. Object to the price and want to shop around.
The “per day” close is nothing new in the world of sales but it seems that it has either been forgotten or is not executed correctly and because of this I wrote this little piece. It’s one thing to play with the monthly notes as if you’re some money magician but when you offer your customer another perspective using their spending habits it lessens the focal on the commitment of the deal and places their attention on a truth. The truth that we all spend money on things we don’t need and when it is in small amounts the large expense tends to stay out of sight. The truth your habits are your commitment even if you didn’t sign a deal to have it. The truth that this big purchase really isn’t a big deal.
I am a consultant in the RV buisness and very passionate in helping others and if I can help you, please feel free to reach out to me via email or leave a comment. Good luck and hope you enjoyed the read.
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