Selling Business-to-Business vs. Selling Business-to-Consumer
There is a common misconception among new business owners that selling an inexpensive product is easier than selling an expensive product.
Many think selling an e-book for $19.95 has to be easier than selling a product for $1,995, or $19,950 for that matter.
Let’s take a look at this and discover some psychology for selling.
At first glance, it would seem that a $19 decision should be easier to make than a $2,000 decision. But is that really the case?
A business owner looking to make a $2,000 decision knows his budget constraints, knows the value of the $2,000 in terms of return on investment, and the time value of that $2,000. Conversely, the $19 decisionmaker has to weigh his $19 against a myriad of other buying opportunities, such as food, gas in the car and going to the movies. So that $19 decision is not an easy choice at all. In fact, the $19 purchase has a hundred times more competition than the $2,000 purchase decision.
One is a business decision, and the other is discretionary. I would much rather appeal to the business owner’s logic for the growing of his business than the discretionary budget of a non-business owner.
People in business think differently. Case in point:
Years ago I used to sell industrial equipment to some of the major automobile manufacturers here in the United States. If they knew that the plant had a goal to make 300 cars per night to remain viable then any and all equipment, at almost any expense, could be justified. Note: they were already in business and they were already producing 300 vehicles per shift. The existing process had to remain in place so that the business survived. This one seemingly simple manufacturing process required millions of dollars - both in capital equipment and human capital - just to maintain the process.
Not to improve it. Not to make it better. But just to maintain it.
What market would you rather sell to?
A business which is already moving and needs products and services to continue moving?
Or a non-business that is just looking to satisfy a current fad, desire or trend?
Take Care,
Filed under New Thinking by David Bullock
Comments on Selling Business-to-Business vs. Selling Business-to-Consumer »
Never thought of it that way before. Makes perfect sense.
It's fascinating to consider the difference between $19.95 and $1,995 etc. For instance, you'd have to sell (and track, and support) 100 of the first to equal one of the second. And I bet in many cases that it wouldn't take 100 times as much time and effort.
Thanks for this food for thought, David.
@ Easton,
Interesting concept isn't it?
Effort is not proportional to value or exchange.
Examples of knowledge and skill are all around us. Take note of doctors, lawyers and business owners…some have leveraged their skillset to create huge value and exchange whereas others with the same skillset have not.
It is not a matter of skills or products; it is a matter of packaging, positioning and leverage.
- David B.