If I had a nickel for every time I heard someone complain
they lost a deal because of price, I'd be a rich man.
Sure, price is an issue when you're selling a commodity
product or service - long distance minutes or soybeans. But to blame price when you're selling
higher-ticket, differentiated products or services is, I believe, a cop-out.
Think about the last couple of major purchases you made -
say, a boat, or a kitchen, or tutoring for your child? Did you choose the lowest-price option, the cheapest option available? Ever take your family whitewater
rafting? Did you seek out the cheapest
outfitter, or were you willing to pay extra - substantially more even - for an
outfitter with a stellar reputation for safety?
Would you choose the cheapest bungy jumping outfitter, or the one that
uses the strongest (and therefore more costly to them and to you) bungy cords?
Few people truly want the cheapest of anything, because they
know you get what you pay for. And while
you may not have chosen the most expensive option in each of these examples,
you most likely didn't or wouldn't choose the least expensive in all cases. Why not?
Because there were other factors to be considered: the hassle if you had
to constantly bring the boat in for repair.
The extra expense of getting the kitchen redone if the kitchen
contractor did a less-than-professional job.
The safety of your family tumbling down that river. Or your own safety at the end of a rubbery
cord dangling hundreds of feet below a bridge
What most people - your prospects included - really want is
not necessarily the best price, but the best value. Value is the amount
of benefit you get out of something vs. the total cost (financial and
otherwise) you'll pay to get it. If
something is inexpensive but is cheaply made, is it really a good value? That's what your prospects are thinking, even as they tell you they need to get a better price
from you. Don't fall for it.
The dollar price your prospects will pay is just one cost among many they may end up paying
throughout their ownership of the product or service they buy. It's just one factor among many that they will consider before selecting a
provider. My wife and I bought our first
house two years ago. Our broker, who was top-notch - introduced us to a couple
of really good contractors. While we could have shopped them around, we took it
on faith that she would only recommend contractors that were tops in their
fields. We suspected that we were going
to pay a premium for this, but we were willing to do so because the lower risk
of screwing up something as important as landscaping, felling trees, and
ensuring pests stayed outside where they belong was something of great value to
us. And guess what? We've been 100% satisfied with the results,
and don't even remember what it was we paid to get them.
To be sure, now that we've been in the neighborhood for a
while and have gotten names of other contractors from our neighbors and
friends, we most certainly do seek to get multiple bids on major work. And we may very well end up selecting a
contractor who offers the lowest price - but we'll never choose one because he does. The low price will be an added benefit of the
good quality and responsive service - two factors very important to us - that
we expect we'll get from him.
Your job as a professional salesperson is to uncover what
value means to this prospect: what
benefits they're looking for, what the costs are of owning your kind of product or service,
and what worries or concerns your prospect has regarding this decision. Then
you need to position your offering as the one that is best aligned with these
three considerations, making sure your prospect understands that the value they're getting from you exceeds
the value they'd be getting from any alternatives - including the status quo -
even if it's not the lowest price.
Identify at least two current deals where you feel you're in
a price battle, and one lost deal you feel you lost on price. For the lost
deal, recontact the prospect and have a frank conversation with him. Ask an open-ended, non-leading question:
Why'd you choose so-and-so? I'm willing
to bet the first thing out of his mouth will be something other than price. For the deals you're currently working, make
a list of all the benefits you know, or suspect, this prospect values. List all the potential costs, including
potential costs they might incur by going with a competitor, but which they
would not incur with you. If you haven't
already done so, determine what worries and concerns your prospects have about
making the "wrong" decision. Once you've done that, you have what you need to prepare
a pretty strong business case that your higher-priced offering is really the
best deal - the best value.