Packaged Pricing Gets the Sale

Maintain margins and remain price competitive with package pricing.

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Whether it is service, parts or wholegoods, nothing is more important than pricing yourself to be competitive in the marketplace. For most people, when I tell them to be competitive they immediately begin to think about margins and lowering their prices. Based upon studies done over the years, to be competitive it's not the price, but the value you add to the sale that makes the difference.

In fact, in North America only about 15% of the population buys based upon price alone. That means that 85% of the population is looking at other factors in determining whether they will or will not buy from any given dealership. I tell all of the dealerships I consult with that the key to profit is their ability to sell the entire dealership to the customer—not just the equipment.

Let’s face it, regardless of what lines of trimmers, chainsaws or mowers you sell, they are all pretty much the same. If you focus all your time and energy on selling equipment, you will many times end up with a price issue that results in a lowered price or a lost sale.

When you begin to realize that a high majority of the people who walk through your door are not brand loyal, but are looking for a dealership they can trust, it changes your entire focus on what you are selling. You can then focus on how to add value to your equipment by selling the advantages of doing business with your dealership.

Three added values

From a customer’s perspective, there are three things that add value: time, money and pain—save me time, make me money, or eliminate a pain from my life. As a dealer, you have to think in those terms.

You need to constantly ask yourself: “How does what we do as a dealership save the customer time, make the customer money, or take away a painful part of the customer’s life?” The more that you can do any of the three, the better you will be able to sell your equipment at a premium.

Purchasing packages

One way to address all three added values is through the development of purchasing packages. Through these packages, you are selling the “whole dealership” when you sell your equipment. Your dealership consists of multiple profit centers: wholegoods, parts, service and delivery. When you sell a piece of equipment, why not give the customer the ability to buy your “entire dealership” at the same time?

We work hard with our dealers to get them to package parts, service and delivery as an option for customers to buy. As a dealer, you can easily create packages to sell with your equipment that are bundled combinations of parts, service and delivery with an extended service component.

Pricing levels

Several of the dealerships that we work with have created different pricing levels for their equipment based upon various packages they offer. It would be easy for you to create a package that gives the customer a discount on their first service or offer a 24 hour service guarantee for a slight additional charge.

Depending upon your creativity, you can easily design packages that offer special pricing on parts, service, and extended warranty for customers who are busy and don’t want to have to worry about their equipment.

Take a moment to think about your commercial customers. What is one of their biggest headaches? Like you, it’s cash flow. Put together a package to attract them that includes a trailer, trimmer and mower. By making it simple for them to build their fleet, you have added value and held your margins.

Also, with commercial customers, think about showing them how leasing the equipment will help improve their cash flow. For most dealers, leasing has become a thing of the past. But for commercial cutters and municipalities, it can be a much better way to manage their cash flow and budgets.

There is very little value for commercial cutters or municipalities to actually own the equipment they use. What they really want is to have new equipment every three years. By working with your commercial cutters to show the benefit of leasing equipment, you open up an entirely new world for you and them.

With some out-of-the-box thinking you can easily create buying solutions for your customers that sell the value of your dealership while allowing you to hold steady on price and grow sales.