Working with salespeople, they tell me, “It’s all about price, that’s all customers care about, price, price, price.” Price may be all customers talk about, but that’s not all they care about. More often than not, when working with salespeople, I see the salesperson make it about price before the customer. There are attitudes and techniques that will help us deal with the price issue with our customers.
Price is the dumb-dumb objection. They don’t even teach it in buying 101. The market tells us that consumers care about more than price. Look at the number of high-end products there are in the market. Products that sell well above similar products in the same market. Why? Because customers care about more than price!
Our beginning attitude should always be that the order is ours. When we move from needs analysis (What do you need?) to buying the product, (Closing) the salesperson must project in everything we say and do that we are working on the order. What do I mean?
Many salespeople get the “This is what I want” information from the customer and then project in everything they say and do, “OK, Mr. Customer, let me go to work for you and see if I can compete for this business!” This is a mistake! This sets us up with the customer as a service agent gathering information for their review. We want to set ourselves up with our customers as partners with whom they are going to do business. To do this, we need to project, “Thank you for this information about our order, let me get the information together and you and I will put this together.”
Let’s discuss price with our customers as if it were any other detail. Which is what it is. Many customers and salespeople get nervous when talking about price. If the customer asks about shipment, color or any other specifics there usually is no tension. The moment price is discussed, everyone becomes tense. Except the professional salesperson. A professional knows that price is just one of many considerations. We discuss price with our customers as a partner. We discuss price as we would which kind of tile we would use in the entryway of our mutual business. If the salesperson stays calm when discussing price, so will our customer.
Below are some techniques and attitudes to help us when dealing with price:
1. Assume the order. Discussed above. Act as if the order is yours. Don’t bring up price. Let the customer bring it up.
2. Don’t bring up price until the customer does. Talk about all the other positive features and benefits of your proposal before you talk about price. If your customer is interested, they will ask about price.
Two good things happen when we hold off on the price issue. One, we show confidence in our proposal. We know it’s a good deal, we’re not nervous. This in turn relaxes the customer. Secondly, when a customer asks about price, we can Close from the price question: “What is the price on this?” “That’s the good part, we can get this into you at $350, so when would you like to take delivery?”
Many sellers will tell you they can get orders from their customers without ever bringing up price. Can you? Have you ever tried?
3. Propose don’t Quote. Many sellers go to their customers and say, “What are you looking for?” or “What do you need?” This makes us shopping services. We will always have to compete on price from this position. When we propose solutions to our customers, we are proposing something unique, special, all our own. When we propose we tell our customers that we are their business partner; we bring value. We are not a leach looking for a To-Do list, we are a valuable business partner who brings value through our proposals. Promote product, service and ideas and you will compete less on price!
4. When a customer says, “Your price is too high.” We say, “Oh, really, we’ve been selling at these levels (or very close to these levels), what are you thinking/feeling/hearing about price?”
Be careful how you say “Oh Really?” Don’t be sarcastic; you are confused and asking for clarification. The “We’ve been selling at these prices” puts us on more equal footing with the customer. (We are selling at these prices – someone is buying – it must be a good deal).
“What are you thinking about price?” keeps the negotiation open. We don’t want to be too soft and we don’t want to be too hard. If we are too soft, we will give away the farm. If we are too hard, the customer will walk away and do the business with someone else. Like Baby Bear’s porridge, this sentence is Juuuuust Right!
Do not say, “What do you want to pay?” It appears to be the same as, “What are you thinking on price?” but is very different. “What are you thinking?” is a discussion question. Mr. Customer, let’s discuss the price. “What do you want to pay?” Gives all the power to the customer and will produce a lower price discussion every time. To be great salespeople, we have to be business partners, discussing issues, not employees, asking for permission.
5. Quality with a Similar Story. “Mrs. Customer, I know this is more than you were thinking of paying, but the quality warrants the price. I have a customer in Texas, a real price shopper. I tried for six months to get him to try this product and he wouldn’t. He was caught in a bind a couple of weeks ago and had to try this product. He loves it and has reordered. The quality makes it a great deal for him and for you also, let’s put this together!”
6. Divide and Conquer. This is also known as “Reduce to the Ridiculous”. We’ve all seen the ads where they tell us we can insure ourselves for just a penny a day. This is reducing to the ridiculous. If you can spread your price difference over many days, months or pieces of product, you can show your customer that the price difference is not really that large.
Example:
Mr. Johnson, I know the 60" plasma is $1,500 more than the 54" but you like the 60" better, right? So how long are you going to own this TV? Twenty years? Let’s do the math Mr. Johnson,
$1,500 divided by 20 years is
$75 per year
$ 6.25 per month
$.20 per day
Isn’t it worth it to have the bigger screen that you like so much better?
7. Fear, Scarcity and Urgency Closes (The Whisper Close) combat price.
Example:
“I know this is more than you are thinking of paying Tom, but people are paying these prices and we are running out of stock, so we should probably get this taken care of before they’re all gone. What’s your PO# on this?”
“Tom, you’re a busy man. You can shop this thing and maybe save a few bucks, but your time is worth a lot, and when you come back to me these could all be gone. Let’s get this one off your To Do list. Give me your PO number, this is a great product.”
8. Exclusive Club – Similar Story. Our product is not for everyone. Not everyone has the mind set or the budget to own this product. Best used at the opening of a sales call:
“John, I’ve found a deal for you that I know you’ll love. It has everything you’d want and more (explain the positives in detail). Many of our customers are thrilled with the product and its results for the business. Yes, it costs more, in the short term, than other options, but in the long term our discerning customers love it. John, would you be interested in hearing about it?”
We have now taken away the price objection. If the customer asks us to continue, they have tacitly agreed to the price. We still have work to do to Close, but we have mitigated the price objection.
9. Is price the only thing standing in the way of us putting this deal together? Great question. Too many times we begin to dance for the customer on price, we bend ourselves three ways from Friday to get the price right for them, AND THEN, there is another slight problem… This is a waste of your valuable selling time. Don’t let it happen to you!
The other beauty of this question is that it is a Closing question. Either way the customer answers, we are moving towards a Close.
10. Just because that is a good deal doesn’t mean this isn’t a good deal also. Or, that’s a great deal, and this is also.
When a customer tells you they can (or did) buy something similar for less money, DO NOT ACT DEFEATED. Many times these supposed lower prices are a test. A test to see if we believe in our product and our price.
This statement shows confidence and takes us from adversary (you’re too high) to partner (You’ve made a great deal, let’s make another great deal!)
Asking detailed questions is also important when using this technique:
• When did you buy that?
• Did you get all you needed?
• Do you need more?
• All specifics: Are we comparing apples to apples?
Many times when we dig with questions we learn that the “better price” didn’t come with the same features as the product we are offering. Be nice, but dig in and find out the truth.
11. Don’t lower the price without customer participation. Many times a customer will say, “Can you do it for less?” and the salesperson doesn’t negotiate, they say, “Sure we could probably do it for less.” Or the customer will name a specific price and the salesperson will say, “Yes, I can do that.” The customer then thanks the salesperson and goes off to shop the new lower price.
When customers asks us for concessions – we use “Give-to-Get”
“What kind of price are you thinking of buying at?”
“Do you have a number in mind that will allow us to put this together?”
“I can negotiate within reason, what are you thinking you need (price-wise) to buy this from me?
Even if the customer throws out a too low price, we are now negotiating towards a Close.
12. Best Quote Price vs. Best Sell Price. Customers will try to sell us the paradigm: “You give me your best price and I will let you know what works for me.” When we try to ask them where we need to be on price, they say, “I don’t play that way, you tell me the best you can do and I’ll let you know.”
Time to change the paradigm. How about, “Mr. Customer, we sell this product all over the U.S., do you know who gets the best prices from us?” Most of the time the customer will answer, “Probably the customers that buy the most from you.” You then tell your customer, “No, the customers who get the best prices from us are the customers that work with us.” Go on to explain, “Mr. Customer, I am giving you my very best Quote Price, but we will have to work together to get my very best Buy Price.”
We must always sell “teamwork” to our customers when they try to make us their adversary.
13. The Negative Sell. The negative sell is very powerful in general and will also work great with the price shopper. “We may not be the company for you.” “We may not have the product you are looking for.” “The quality of this proposal may not allow us to get to the level you are looking for.” Any of these approaches will slow down the price shopper.
Note: Not all customers are right for our product or service. Chasing customers on price can be frustrating. Use the negative sell to test for interest. Is there any interest from the customer or are they just shopping? If there is interest, our customer will say something like, “No, I want to hear what you have to say.” Or “Let’s hear the rest of it, maybe price won’t be such a big deal once we’ve seen the rest of your proposal.” If there is no interest or response to the Negative Sell, maybe we aren’t speaking to the right customer.
14. Cruel but True. We don’t lose business because our price is too high; we lose business because we are not good enough salespeople or negotiators. We can’t let ourselves off the hook by saying, “If we had better prices I’d sell more.” I worked on trading floors for years selling a commodity product. Some sellers consistently attained better prices in identical markets with identical products. Why? Because they were better sellers.
Price is an issue in selling. Use the above techniques and attitudes to win more of your price battles.
Editor’s Note: James Olsen is the founder of Reality Sales Training. He has over forty years of sales experience having worked with Nike, North Pacific Lumber and Forest City Trading. He has worked selling lumber and forest products with a focus on sales growth, and he recently spoke to the Western Pallet Association. You can learn more of James’ sales wisdom from his books An Unfair Fight: How Winners Sell and Sellers Win, Leadership Sales and Selling Lumber: Sales Secrets of a Lumber Broker. For more information, visit http://www.realitysalestraining.com/ or call 503-544-3572.
