For a lot of customers, price is a circus bear in a tutu: It can seem absurd, and it can also bite. Sales folks are quite familiar with customers choking on the price. You can’t blame them, especially the ones who’ve never been in the exact buying scenario of purchasing, say, a laser imaging machine or a fleet of fully loaded double-decker party busses. Even if they’re buying lag screws, price can be a shock if they’ve never bought them before and had thought in their inexperience that the price would surely be lower.
Everyone Wants a Screaming Deal
And we’ve all been in the first-time buyer’s shoes. Wait, how much for a new garage? It’s just a garage? A wedding cake cost how much? Maybe a sheet cake from Stop and Shop would be better—we’ll just stick a Barbie and Ken on it. It can seem absurd to pay a lot of money for something that surely you could get for cheaper … somewhere. You can relate to your customer’s sticker shock because you’ve been in the purchasing position in which you couldn’t wrap your mind around the true value of, say, a wedding cake that doesn’t come with a molded-plastic cover and wasn’t made by a deli-counter lady wearing a shower cap.
In other words, we can think of times when we couldn’t connect the true value with the price because of a lack of context. Likewise, when your customer doesn’t accurately comprehend the problem, they cannot mentally/emotionally connect the solution’s price to its value. Your job is to make that connection for them.
Understand that it may not be their own reaction that the buyer is worried about, but instead the presumed sticker shock of other stakeholders in the organization and how the buyer will have to manage those reactions. The boss might have a meltdown over the cost of point-of-sales software; just as the spouse might dog-house you for upgrading to the jet ski fully equipped with a beer tap and wifi.
Know too that what you’re dealing with sometimes is not the customer struggling with price, but the customer responding to price based on conditioning or habit: The price could be bargain-basement and you’d still have them knee jerking on how they’re not about to get taken to the cleaners.
Resistance Isn’t Futile
No matter the source or strength of the pushback on price, you’ll do well to put some thought into the transaction beforehand and resist making concessions on the dollar figure right out of the gate. Rather than begin the “How much can you afford?” discussion, broaden your customer’s view, enabling her or him to see the problem from a different angle. Deemphasize the price and instill confidence that a win-win outcome will result from them purchasing your solution.
So how do you do that, exactly? Start by actively listening to the customer, really understanding the problem for which they need a solution. Get the whole story. Hone in on important details. Maybe they’re turning to you because a competing product failed to meet their needs. Once you’ve got a good lock on their scenario, appeal to their reason by expounding on the value of a successful outcome, as opposed to spending less and getting what you pay for—something inferior that will not accomplish the stated goal and could cost more in wasted time and money.
Making It Work for Them
Customer needs vary. Perhaps ease of use tops their priority list of must-haves; or maybe it’s on-going technical support; or features that can be activated down the line, as the company grows. Discern what the top three most important product benefits are to the customer, and then highlight those when you present your solution. When it comes time to negotiate the price, bring up those benefits; use them as leverage if your customer objects to the price. Make it clear that customization is part of the value they’ll be getting for their money.
The Early Price Request
If you find your customer asking about price before you’ve even determined what their needs are, appease them with a price range and use it as a way to continue to gain the information you need to build value in your offerings. Just word it with something along the lines of, for example, “Not a problem, I am happy to share some ranges with you and once I learn more about your objectives, I will be able to provide some more specific pricing based on your needs..”
You won’t be jumping off the negotiation cliff into a bunch of chump change by prematurely discussing price parameters when the customer insists on it. Just position your answer in a way that allows the buyer to understand the value of your solution. In the art of the deal, you’re the artist. You’ve gotta know how to paint your way out of a corner and end up with a pretty price picture that everyone can enjoy.