In “Can You Spot the Best Sales Message“, I asked you to pick the best message out of three choices. More readers disagreed with my choice than agreed with it. When that kind of thing happens, it generally causes me to rethink, since my readers are the REAL experts. Not in this case, though. I think that some of you have become, well, a bit religious about “selling value,” and that’s clouding your judgment. Some of you don’t seem to realize that sometimes selling value is a dumb move.
The message in question is:
Travel Agent: “I realize most people make their own travel arrangements, but before you secure your itinerary, send it to me and let me beat your price!”
Several comments criticized this message on the grounds that the agent should be selling on value rather than on price. Here’s a typical comment:
Dtpnola: Every good sales & business book & technique I have ever seen, as well as my own experiences, say don’t sell the cheapest price.
Such comments are understandable, but also wrong, for four reasons:
First, the question in the post was about the message, not the business model. Given the business model of that travel agent, that’s a VERY effective message. Clear and concise. You can quibble with the business model, but it’s still a great message for that model.
Second, the travel agent is NOT necessarily competing on price. This may seem confusing, but the agent is NOT selling tickets. The agent is selling his services in arranging travel. His competition is the tendency to “do it yourself” and his “value add” is the ability to get those arrangements at a cheaper price. It’s not even clear that he’s being paid a commission on ticket sales. He just as easily could be being paid a percentage of the difference between the self-booked price and the price that he was able to book. In this case, arranging the travel at the lowest price would generate the greatest revenue.
Third, selling value can add to your sales costs. If it takes the exact same amount of time to sell 10 things for $2000 each as it takes to sell five things for $3000 each, you’re losing revenue. While it’s true that the “value-added” $1000 on those five sales may be pure margin, if the main cost of sales is your time, you can often generate more profit simply by moving as much product as quickly as possible at the lowest price, which is usually (but not always) the easiest way to sell. There’s nothing wrong with easy, when it makes you MORE money.
Finally, and most importantly, sometimes selling value simply doesn’t work. When a product category becomes commoditized, it is no longer possible to sell value, except in small market niches. Consumer electronics are a perfect example. They sell through the cheapest channel, and attempts to add value fall flat, like the now-defunct Tweeter retail stores.
While you may be able to find a niche that works, trying to sell value in a commoditized market is usually just gnawing at the bones of a dead business model.
The travel market is a case in point. While there are still travel agents hanging in there, travel purchasing is largely driven by price. Anybody with a PC can now comparison shop for vacation packages and business travel at the lowest price.
What value-add can a travel agent provide? Carry your luggage or something? There’s no place in the travel business to add much value, except in high-end niche markets, like renting private jets. As a result, the travel agency business has been in the doldrums for years and is getting absolutely clobbered by the current recession.
The travel agent with the “beat your price” message is actually quite clever. He is turning people who don’t (and won’t) use a travel agent into his customers. He is, in essence, de-commoditizing the market by changing the business model. He’ll get your tickets cheaper than you can get them. Bingo, you’re a customer.
It astounds me that everyone can’t see how brilliant that is. Much better than whacking around trying to sell people “value-added services” that they don’t want. For most travelers, price is king, and this guy can get them a better price.
Heck, I may call the guy next time I travel and I haven’t used a travel agent since 1993.
READERS: Have I missed anything? Like I said, most of the time I’m more likely to believe what you guys say than what my own experience and logic tells me. But this time, I’m pretty sure I’ve got it right.
