New salespeople seem to love to talk about price. They compare one product with another on the basis of cost, they go on about the discounts they can give, and they try to outsell the competition with claims of lower price.
But all that talking about price focuses your prospect’s attention on it, even if they weren’t overly concerned with cost at the beginning of the sales call. Interestingly, studies show that the typical salesperson is a lot more concerned about price than is the typical customer.
Smart salespeople handle price as if it were a minor consideration. Of course, when the prospect makes it an issue, they deal with it effectively. But even then, they try to minimize its importance.
Follow these three tips on your next sales call to minimize the importance of price while still maintaining a healthy margin.
1) Focus on benefits, not features or price.
The best way to convey to your prospect that your product is the most appropriate solution to their problem (regardless of price) is to focus all your attention on the benefits. Never assume that a prospect fully understands the benefit of a feature -- always point it out and expand on it. The more benefits you apply to the prospect’s needs or wants, the more often you’re able to show them what’s in it for them if they choose to partner with you.
2) Build value and then work to deliver it.
When you create value in the eyes of your buyer, the product or service you’re offering becomes more desirable, and price becomes less important. By establishing value early on, you can actually make a higher price work for you as a competitive advantage. Sensible buyers realize that with most purchases, you get what you pay for, and when you do present your price, it can make a statement about the quality of your product.
Use the sales call as an opportunity to pinpoint exactly what the prospect considers valuable in a solution, and adjust your offerings to meet that criteria. Price becomes less of an issue when a prospect sees that their problem will be solved.
3) Present your price confidently -- and stick to it.
Success in sales will be driven by two essential factors: margin and volume. In order to maintain your profit margin, it’s necessary to present your price with confidence and stand firm on it. And to deal with price-cutting attempts, you’ll need to get comfortable responding to the phrase “your price is too high.” Try following up with these replies:
- “Let me tell you why our price is where it is.” At this point, repeat each of the benefits your product provides and the emotional costs your prospect will save by partnering with you.
- “Let me explain how each of the things we’ve discussed will help you.” Expand on the benefits they’ll receive and the emotional relief you’ll provide them.
- “We can work to give you a better price. But to do that, we’ll have to remove some of the components we’ve discussed. Which would you like to eliminate?” Your prospect will likely not want to remove or reduce any of the benefits you’ve provided. When you use this as your last option, you’d be surprised at how often a prospect will find a way to make the price work.
By focusing less on price and more on the value you are able to provide your prospect, you can keep your buyer’s attention on what they’re ultimately concerned with -- finding the right solution. After that, it’s just details.