“It sounds great, but it’s a bit too expensive…”
How many times have you heard this from a potential customer when you’re selling? Heck, how many times have you said this yourself, whether you’re hiring a service for your company or shopping for something nice for the home?
In business ownership, price is always tricky. Too high and potential customers may be discouraged and will start shopping elsewhere; too low, and they may think whatever you’re offering is of inferior quality – cheap price, cheap service.
There’s an article from Phil Barton over at Action Coach, from way back in March 2008, that talks about how to handle the issue of price vs. perceived value. Entitled Why Prospects Challenge Your Pricing Proposition, it’s a pretty handy resource for helping business owners and salespeople understand how to level customers’ expectations of both price and value. Here’s a look at it:
“Most consumers tell salespeople they want low price – when what they really want is low cost. It’s natural to want to take issue with this statement, but consider what you, as a consumer want. Do you want the cheapest, or do you want the product or service that best solves your problem, answers your need, or fulfills your desire?”
The question at the end of this paragraph helps put the issue into perspective: when you shop, do you go for cheap, simply for the sake of avoiding paying too much, or do you go for the best possible solution to the problem you’re paying for, regardless of price?
As a business owner, you want your prospects to know that what you’re selling is worth the price. The value of your products and services is on par with what they’re paying. Phil goes on to offer some insight on this as well:
“The truth is, most prospects or clients want their problems solved. They recognize they get what they pay for. They also know that the distaste of poor quality lasts far longer than the sweetness of the tantalizingly low price.
Buyers will object to price when they feel what they’re being asked to pay is higher than the value they perceive in the transaction. When an ineffective salesperson encounters price resistance, they usually lower the price.
Unfortunately it’s not usually a price or cost issue at all, rather one of the perceived value being too low.
What can you do to raise your prospects/clients notion of the relative value of what you’re selling?
A simple way is to find out what is troubling them most, and then show them how your product or service will satisfy, or overcome this need, want, or obstacle…or, even better, exceed their expectations of value. This way, price will become secondary. Not cost, but price.”
It seems simple, but it’s easier said than done – and easier still to simply lower the price when you’re negotiating in order to guarantee a sale. But if you can offer your customers value that syncs with price, suddenly what they’re paying isn’t such a big deal. The key is in ensuring that they know they’ll get, as the saying goes, more bang for their buck.
This is one of those timeless articles that, despite being written half a decade ago, still holds as much truth and value today. Check it out and see what else Phil has to say about how to handle prospects that make price an issue when you’re selling.
What do you think? What have you done, or what would you do, in a selling situation where price becomes the main point?
Your thoughts, comments and stories are always welcome, so let us know!