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  • Bob Burg

“Master the contents of Endless Referrals and you will practically GUARANTEE your future success.”

~ Tom Hopkins, Author, Master the Art of Selling

Sales, Business, And Those Unchanging Economic Laws

December 9th, 2011 by Bob Burg

There are many reasons why people will say “no” to buying a product or service they were considering and would like to buy. Often, it is money-related. Always, it is price-cost-value-related.

There is an economic law that is immutable and unchanging. It has always been, is now and always will be. And unless other Universal Laws such as the Law of Gravity change, this one won’t either.

“People will exchange their money for that which they feel is of equal or greater value than the money they are exchanging it for.”

Obviously, the more perceived value as compared to the price (or costs) involved, the greater the chances are that they will make that exchange.

What is meant by “costs”? There could be time costs, money costs, lost opportunity costs (i.e., choosing your product rather than your competitor’s) and many others.

Remember, our prospect has their own reasons for buying based on their needs, wants and desires. So, we must be able to communicate that the value they are receiving is higher than the price and the costs.

What is your method of doing this with regards to your product or service?

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8 Responses to “Sales, Business, And Those Unchanging Economic Laws”
  1. Great Piece that got my mental gears turning this morning. I’ll post this inquiry for the rest of the passers through to respond to as well as it may help me in my endeavors: How does one get the time of a person to hear the story of the needs they didn’t know they had?

  2. Bob Burg said at 10:01 am on

    Paul, thank you. Glad you enjoyed the post, and thank you for posting it for others to comment on, as well. In answer to your question, you get the appointments through building the relationship (with that person or someone that person knows, likes and trusts, who know, likes and trust you enough to refer you). Once you get the appointment, that’s when you must be able to communicate the need, as well as the value being greater than the price/cost. Thanks again!

  3. Linda Ryan said at 9:10 am on

    Completely agree and here’s a timely example:
    I dropped my iPhone in water and ruined it. I could have NOT spent $200 yesterday for a new one. I could have spent $0 and just reactivated my not ruined, perfectly good Blackberry. However… $200 is more than a fair price to pay for the abundant things my iPhone allows me to do easily….like keep up with reading awesome blogs like this while I’m waiting for my oil change! 🙂

  4. Bob Burg said at 9:59 am on

    Thank you, Linda. That IS a great example (not the part about my blog posts – thank you though – but everything else you wrote). LOL

  5. Doug Wagner said at 3:29 pm on

    Another good one. I really like the idea of considering all the costs.

    One exercise to go through is “what if we gave our product/service away for free”. Assuming our product/service has value, the value now exceeds the monetary cost for sure. What other things might stop our customer from acquiring our product?

    Now I don’t suggest giving everything away. But it might allow you to think of all the other reasons and then work on decreasing customer soft costs and increasing value. Then you might even be able to raise your prices.

    Just a thought.

  6. Tim Graham said at 11:07 pm on

    A great read at a perfect time. My business being seasonal its easier to spend money in the summer when the cash is flowing but in the winter I must calculate every cost sometimes putting off that much needed piece of the business puzzle until i am confident we are in the clear. I dont want to be wasteful and I want to be sure my employees remain employed. What is more valuable? My empoyees!

  7. Bob Burg said at 11:53 am on

    Doug, great exercise to make sure you can both qualify and quantify the value.

  8. We buy money with products all the time. 😉

    I find it fascinating that people don’t look at it that way.. but we actually BUY cash with what we are selling. We give them the product and get cash in return. Consumers are greedy – for good quality stuff.. 😀

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