In today’s competitive business environment, it often seems that the most important aspect of someone’s buying decision is price.
People constantly ask for lower prices, compare our prices with the competition, and badger us to give them a better deal. Regardless of what you sell, I suspect that you face price resistance on a regular basis.
That means you need to learn how to resist the temptation to offer too much of a discount, too quickly.
Here are some ideas that can help:
Establish the value of your offering before you discuss price.
The sooner price is brought up in the sales interaction, the more of a focal point it will become and the more difficult it will be to demonstrate your value. When price is presented too early in the conversation, everything that is said afterwards comes across as trying to justify that price.
I encounter this regularly in my business because one of the first questions most companies ask me is, “How much do you charge for a presentation?”
I have learned to redirect this question until I have fully assessed their situation and presented a relevant solution. If someone insists on an immediate price—and it does happen from time to time—I never get the sale.
You need to increase the value of your product or service in your customer’s mind before you actually discuss the dollars associated with it. This does not mean telling your customer everything about your product though. It means taking the time to thoroughly assess their situation and position your offering in a manner that shows them how they will benefit.
Focus on the outcome or results
This is particularly important when you deal with C-level decision makers. High level executives seldom care about the details. Instead they want a macro view of the solution.
I fell into this trap when I was contracted to deliver a train-the-trainer session for a client. The VP dropped by the meeting room and after a few pleasantries. I began telling him the details of what his trainers were going to learn, but he wasn’t interested. All he wanted to know was whether or not we had prepared a detailed outline so his internal trainers could deliver the program consistently across the country.
It would have been more effective for me to have said, “Mr. VP, when this workshop is completed your trainers will be able to teach your sales team exactly how to improve their sales. When you combine it with the follow-up program, it means that you will see an increase in your sales.”
Whenever possible, translate the benefits of your product/service into actual dollars.
This approach is extremely effective in reducing price resistance. For example, if a company will save thousands of dollars in operating costs after implementing your solution then a purchase price of several hundred dollars seems worthwhile.
Don’t drop your price
It amazes me how often sales people quickly drop their price at the first sign of price resistance. However, most consumers, and certainly all corporate buyers, have learned that pushing back will save them money.
What’s even more interesting is that many sales people offer a discount BEFORE they are even asked. Not only does this affect your profitability, it also teaches your customer that you have price flexibility and conditions them to ask for further price concessions, now and in the future.
I will never dispute that price is a factor in every sale. However, it is seldom the primary factor behind someone’s final buying decision.
If price was the only reason people bought goods and services, high-end boutiques and companies that sell premium products would not exist. However, if you fail to demonstrate the value of your product or service, price will become the primary area of focus simply by default.