- “Your price is too high!” or
- “I’m just not seeing the value.”
Depending on what you heard, it will dictate how you handle the price concern. You are now either focused on the price of your product or focused on the value your product offers.
The dynamics of price in the selling situation is a balancing act. Your prospect or customer is always weighing the price (or cost) against the perceived value (benefits) of the product. Picture a scale, on one side is price on the other side is value. If the price outweighs the value . . . “it’s too expensive!” If the value outweighs the price . . . “it’s a good deal.”
You always want to hear, “Sorry, I am just not seeing the value like you are.” Then focus on building value. Start piling on the benefits of your product as it pertains to their needs and why your product is worth what you are asking for it.
I was fortunate to start my career out selling a premium priced product in a commodities based market. So, the number one objection I heard was “you are priced too high.” Being a manufacturer’s rep, I could do nothing about the price and I had to sell purely on value. To me that statement was one of perspective.
Never be concerned or nervous when the customer asks the price. Tell them, but keep in mind the scale. No matter what has been discussed, if you just state the price what just happened to that scale? That’s right, it tilted to price and a response that should not surprise you is . . . “that seems high.” EVERY time you state the price you will need to quickly make a statement of value to balance out the scale in the customer’s mind, ALWAYS.
Further, to build value effectively you need to know as much about the challenges the customer faces and their business. More than likely your product provides value beyond its primary function or use. I list everything I know about their business and how my product brings value to each aspect. I then ask my customer, “What would be the value to you to . . . get, have, eliminate, avoid, be able to, etc.” Also, how the product adds value to their customers. For really challenging customers, I ask something similar to, “What problems does it create (or will continue) . . .” for them if these needs go unmet as a result of not using my product.
Always help the customer see the bigger picture. Typically during a discussion the customer’s focus is narrow, primarily on your product and price. Show them the bigger picture. For example, I was recently talking to a customer about my audio CD sales training series and they thought the price was too high for the 10 CD series. I knew their sales reps regularly provide lunch to their different customer offices. I immediately asked how much a lunch in one of their customer’s office cost the company. Why ask that? I knew two things:
- The cost of the audio CD program was about the same as providing one lunch to one office one time for one sales rep.
- Their competition is doing it too, so how great is the R.O.I. on one lunch.
So, I asked what do you think would produce a greater return on your investment, one lunch, one time, in one office or providing a whole host of selling skills and techniques (I listed the skills and value) they can use at EVERY lunch for no more than the price of one lunch?
Further, put yourself in the customer’s mind for a moment. Why wouldn’t a customer challenge your price? The customer knows three things:
- I now have you focused on the side of the equation I want you focused on . . . Price!
- At the very least, I pay what you are asking me to pay.
- At the very best, you reduce your price.
NO downside risk. As a customer, why would I not ask you to do something about your price? Further, reducing price is a slippery slope. Once you go down that road, forever will it consume you with that customer. You have set a precedent.
- All your pricing is negotiable,
- You made a statement of the true value of your product to the customer,
- And it’s going to be hard to raise your price to normal in the future.
So, look before you leap. Price concessions are a slippery slope. Customers buy on value, what a product will do for them and their company . . . not price. Remember, price is just one of many features of your product. What is your product doing for the customer?
Instead of “It’s too high!” Now, you hear . . . “help me to see the value!”
Copyright 2012 J.P. Thompson. All rights reserved.