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Any Price can be Too High As salespeople we are confronted by prospects, who more often than not, seem to be consumed with getting the best price. However, any price can be too high, and this can include the lowest possible price the majority of the time. Many times this price issue is disguised in a number of overused phrases common to both salespeople and prospective consumers alike. Any of the following statements fall into this category. Here are a just a few that salespeople tend to hear on a regular basis, but until you understand why the prospect relies on using them as often as they do, most in sales will be both confronted as well as confounded by them. Statements such as: “We have only budgeted to pay $X for this item.” “Our research suggests that most products in the market are around the $X price. Your’s is far above that.” “My neighbour has been dealing with the ABC Corporation who always look after him on price and give him good after sales service. So why is your price so much higher?” “I just read in the latest catalogue from the XYZ Electrical Department Store that their computer goods sell more than a half the price you are suggesting we pay for each computer. I really can’t justify the difference.” In fact there are dozens of similar statements that I can trot out here, but doing that won’t help you sell just one more product or service more than you do now. So before you get drawn into what can’t be done, there are two factors you should consider here: Any price will always be too high if they are pre-committed to a lower priced item or service. Any price will always be too high until the value has been established. What really gets to me is that what I experience in this one area is that the majority of salespeople are tormented by the same kind of objection. Far too many of them ask me, "What do I do when the customer says my price is too high?" or “I didn’t budget for that amount,” or “Really can’t pay that much,” etc. My response is always the same, and it’s crucial you use a similar response to the one I do. All I tell them is, "Whenever the prospect tells you that your price is too high, tell them that they are right." In other words, if I was talking to the prospect I would simply say, “Mr Prospect, if you believe my price is too high in your opinion, and I admit it is definitely far higher than that offered by the ABC Corporation, you are right, my product is far higher than theirs.” Now before I go on, allow me to add that the price objection is traditionally the quickest way for a prospect to get rid of any salesperson and you will hear it almost every time you haven’t discovered any good reason for them to buy. So then, tell them they are right. Chances are, if you are hearing what I believe to be a classic price objection, you simply need to understand that you don’t have a pricing problem as much as you have a perceived value problem. In the simplest of words, until you establish what your product or service will mean to the prospect (it’s real value to them), any price is too high. Price is seldom the real issue. Understanding the value of what it will do for them after they take ownership of it, is the real issue. "What do I do when the customer says my price is too high?" or “I didn’t budget for that amount,” or “Really can’t pay that much,” etc, my response is always the same, and it’s crucial you use a similar response to the one I do. All I tell them is, "Whenever the prospect tells you that your price is too high, tell them that they are right." In other words, if I was talking to the prospect I would simply say, “Mr Prospect, if you believe my price is too high in your opinion, and I admit it is definitely far higher than that offered by the ABC Corporation, you are right, my product is far higher than theirs.” Now that I have admitted that I agree the price is too high, all I need to do is to bring in the matter of value. And it’s how I bring in the value and leave them wanting to know more is crucial here. So let’s now go back to the previous paragraph and finish it off the way I normally would. Remember what I said after admitting what far too many salespeople me when confronted with questions such as, "What do I do when the customer says my price is too high?" or “I didn’t budget for that amount,” Or “Really can’t pay that much,” etc. my response is always the same, and it’s crucial you use a similar response to the one I do. All I tell them is, "Whenever the prospect tells you that your price is too high, tell them that they are right." In other words, if I was talking to the prospect I would simply say, “Mr Prospect, if you believe my price is too high in your opinion, and I admit it is definitely far higher than that offered by the ABC Corporation, you are right, my product is far higher than theirs.” So take notice of what I say and the way I present this next part, because this will give you the difference between a stand-off to getting the prospect to want to hear you out because what you can for him/her/them. “Mr Prospect, if you believe my price is too high in your opinion, and I admit it is definitely far higher than that offered by the ABC Corporation, you are right, my product is far higher than theirs, but all I would like you to do is to carefully consider why I am able to tell you we do far better on both quality and price with every comparison ever undertaken.” Pause, take a deep breath, then add, “Now, look like the type of guy that I am sure would like the best quality at the best price in everything you invest in. Right?” Wait for an answer, and it is important you allow them to digest what you have just said. So stop the selling process and translate into a thinking process simply by saying, “Let me give you a moment or two to think about what you would really like to have at the best price, is that OK with you?” Encourage them to put all of their cards on the table before you start working at getting a solution together for them. Do this with questions like, “Now tell me, having thought about it briefly, in an ideal world what would you like to achieve at the best possible price?” The next part is crucial and must be executed properly to obtain maximum effect. No matter what they say, stop, smile, look them in the eye and simply say, “Is that all, I was under the impression you were looking for much more for what you were prepared to pay.” Now pull out a pen and piece of blank paper and start on the balance sheet in the same way we did this in the prior close. However, the difference this time is the terminology. I would use phrases such as, “We all want everything the ideal world has on offer for us we also need to live in the real world. So let me write on top here what you want to achieve in the IDEAL WORLD on the left column, and now draw a line and I‘ll help you write on top here what you want to achieve in the REAL WORLD. We do that on the right.” The reason this works is that we all know that things in the IDEAL WORLD are always more expensive than the things in the REAL WORLD. The truth here, it it’s a nice way to get the price down so that you can start building value into the lower prices of the things in the REAL WORLD. I have an adapted true story about a push bike my father bought me as a child and delight in using it in situations such as this. “When I was a youngster I wanted a bicycle, but time were tough and money was tight. Although I had dreamed of a Malvern Star bike for a while, my father explained the Malvern Star was too expensive and the white bike he had put a deposit on was just as good. Next day, he took me to the bicycle shop, I rode it part way around the block, fell in love with it and he paid the balance. I rode that bike everywhere, when things got loose he tightened them, repaired a few punctures, and then things started going wrong. He went back to the bike shop but was told it was out of warranty as the warranty was for 3 months and I had been driving it for around 6 months. He welded part of the frame that was stressed, but another part cracked. Between the weld marks and areas over-painted the bike began to look ugly. Almost 12 months later he gave in and bought me a brand new Malvern Star bike with a 2 year manufacturer’s warranty. Two years later, apart from worn tyres and a few scratches the bike was as good as it was the day he bought it. 4 or five years later it was given to a neighbour as a gift and continued to work well. Why, well in my opinion, the Malvern Star bike was a quality product, the other was bought on price. The same applies for all things on sale today. Price rarely outlasts goods bought on quality.” Now here is an important issue all salespeople should take time to familiarise themselves with. Studies by all manner of buying groups have been telling us for years that price is seldom the prime issue in buying decisions. Most of the research that is available today indicates that price ranks as only the fifth or sixth most important buying consideration. However, and for some strange reason, price just seems to be the most important in the minds of a lot of sales people, so much so that it often overrides the value of quality as opposed to price. An executive with a major retailing chain recently said, "We’ve found that our shoppers come in talking about price and leave buying value." We know he is right. To prove it all you have to do is stop by any parking lot and count the number of Russian made Lada automobiles you can find. (If you can even remember what they looked like.) Value is always the issue. Value is the combination of prospect need, price, perceived quality and anticipated service. In that equation need is the key. Its the difference between dropping by the sporting goods store to shop for a raft for weekend outings or looking for a raft when the ship is sinking 50 kilometers off shore. ***************************************** This Article is by Peter Collins - In a sales career spanning more than 50 years, Peter Collins has focused on helping and bringing out the best in others - whether it involves training or mentoring salespeople, managers, business consulting to SME’s. Since the 1970’s Peter has built a reputation as a Nationally and Internationally Published author, and has 65 books to his credit, but he is mainly known for one book based on the Audio Tape series of the same name, Over 50 Ways of Closing the Sale. In his personal life, Peter has been sought after as an encourager and motivator that has given of his time and talents freely despite his busy schedule. Subsequently, he has assisted churches, pastors, community and charity groups, as well as individuals through his teaching, training, development and on-going mentoring. Peter can be contacted through his website – profitmakersales.com - Submit your articles to AMAZINES.COM
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