When it comes to discussing price with your prospects, you may find it beneficial to break down the larger numbers into small chunks, such as cost per use or per week. (“And you can enjoy all those benefits for just $2.97 a week.”) The smaller the number, the more attractive it will appear. This approach helps put a prospect’s possible outlay in a much more manageable context.
If you are producing a quotation for a product or service that has multiple elements, itemize the cost for each element. This helps to build the value because prospects can see at a glance all the elements involved. The individual prices for each element will seem more manageable than the total sum.
If you have correctly identified a prospect’s requirements and proposed aligned solutions, then chances are you won’t be suggesting a Rolls Royce version of your product when the customer requires a Mini. It’s much more effective sales strategy to offer prospects something they have asked for and makes it easier for them to compare prices. Once the prospect has been able to comparison shop and is satisfied that your prices are competitive, you can build upon this base and attempt to up-sell.
Focus on the difference between what they say they are willing to pay and what you are asking for. This reduces the amount in their minds and is another opportunity to highlight the additional benefits they will gain by rising to the next level. For example, you might say, “You’ll get all these extra benefits for just [difference in price] a week more than you’re paying at the moment.”
Change the deal
If these tactics are not successful and the prospect insists you lower your price, then change the deal. This can help you to maintain your credibility and justifies the reason for you lowering your price. If you simply comply with their request to match a competitor’s price, you are implying that you were asking too much in the first instance. Take out aspects of your proposition to make the cost conform to a prospect’s budget.
Make sure that your clients understand the cost structure of what they are buying. For example, the “price” of something is what clients invest now, at the time they make a purchase. The “cost” is what they will end up paying in the longer term. A product/service that requires a higher initial investment may be more cost-effective and in the long term provide better value for the money.
For example, imagine two brands of dishwashing liquid. Brand A costs more to buy initially than Brand B, yet because Brand A is more concentrated (feature), it washes twice as many plates as Brand B (benefit). So, overall Brand A is actually much better value in the longer term. In fact, if you calculate the investment “per plate,” then you have reduced the price to the lowest common denominator.
Price objections do not go away easily; they are real obstacles and can be difficult to negotiate. But the most successful sales professionals anticipate them and deal with them head on.
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Jonathan Farrington is a globally recognized business coach, mentor, author, consultant and chairman of The JF Corporation and CEO of Top Sales Associates. For more information and tips from Jonathan, visit http://www.topsalesworld.com/, or go to his blog at http://www.thejfblogit.co.uk/.