“So, how much will it cost?”
“What would something like this run me?”
“We have a very limited budget. I don’t want to waste my time. What’s your fee?”
“Sounds to me like you’re talking about a lot of money. Before we go any farther I need to know what kind of money we’re looking at.”
We’ve all heard these questions or a million other variations of them.
They always seem to come way too early in the conversation and always at an inopportune time.
The fact is that no matter what you’re selling, the price of your goods and services is always a primary concern to your prospects. Whether you like it or not, price is top of mind with the majority, if not all, of your prospects. If it isn’t, you might need to question just how serious your prospect is since price is always an important part of the equation when contemplating a purchase.
The fact that prospects are concerned about price isn’t a surprise and it really shouldn’t be a big deal—except it so often comes up before you’ve had any opportunity to establish the value you bring to the table for the prospect, and price without value equals a no sale.
The price question presents you with a serious dilemma: how do you honestly answer the question of price, yet at the same time save a detailed conversation about price until you have had the opportunity to build the value in your product and service that justifies its price?
The early introduction of the price question seems to put you in a position of having to choose between two rules of selling that appear to be antithetical to one another at this point-1) always answer your prospect’s questions honestly and directly, and 2) never discuss price until you’ve built value in your product or service.
Fortunately, you can honor both rules.
The key to addressing the price question is understanding why the question is asked in the first place. Many salespeople see the price question as an objection; it isn’t. It’s an honest question by the prospect who is trying to determine their interest level in your product or service.
Just as you are trying to qualify your prospect, they’re trying to qualify your product or service, as well as qualifying you, and one of the major qualification questions they have is price. They’re simply asking the question too early, before they have sufficient information to determine whether your product or service justifies the investment.
The easiest way to handle the question is to give the prospect a direct answer and then bridge back to your investigation of their wants and needs to build value. Depending upon the product or service you’re selling, your answer to price may be specific-”This truck is twenty five six fifty four”-or general-”depending upon your specific needs we find when we do the needs analysis, the complete instillation of the software and training can range from a few thousand dollars on up into the low to mid five figures,” or, “Frankly, Jack, at this point I really don’t know because I don’t know what needs to be done, if anything, but I can tell you that the investment can range from just a few thousand dollars on up. But it depends upon the scope of the work to be done and we’ve still to determine that.”
Your statement then needs to be immediately followed up with a question to bridge back to investigating their needs to help you build value.
In the truck example above you might then ask, “Will you be pulling a trailer often, or just on occasion?” In this example your full statement would be, “This truck is twenty five six fifty four. By the way, will you be pulling a trailer often or just on occasion?” You’ve answered your prospect’s question, but you then lead them back into a discussion of their needs, which will help you determine what vehicle will best meet their needs, give you information to highlight the features of the truck that will meet those needs, and the benefits of those features that will give value to the price of the truck.
In the software example, the full statement might be something like: “Well, Nancy, depending upon your specific needs we find when we do the needs analysis and the modules you need, the complete instillation and training of the software can be anywhere from a few thousand dollars on up to the low to mid five figures; by the way, what other applications do you run that our software will have to be integrated with?” Again, you’ve given an honest answer to the price question since at this point you don’t know what the package will cost. Instead of trying to answer an impossible question, you’ve given the typical cost range and then followed with a question that will put the conversation back on track of investigating your prospect’s needs, allowing you to gather the information you need to build value in your product before you get into a serious price discussion.
In the third, the consulting example, the full statement might be: “Frankly, Jack, at this point I really don’t know because I don’t know what needs to be done, if anything, but I can tell you that the investment can range from just a few thousand dollars on up. But it depends on the scope of the work to be done and we’ve still to determine that. What do you think has been the cost of the shipping department’s logjam that has extended shipping time by almost two days?”
Price questions need not create problems for you or for your prospect. Price is a natural concern for the prospect, but knowing a price without understanding the real value of the product or service is meaningless. Your job is to answer your prospect’s question and return the conversation to a point where you can build value for your prospect, so they can appreciate the price in context of value.
If you refuse to answer the price question you run the risk of insulting or angering your prospect-not to mention the damage you do to your credibility and trustworthiness. But if you begin a serious discussion of price before you’ve had the opportunity to build value, you ask your prospect to make an investment without having a basis to determine whether the investment is justified.
Great article, Paul. I agree completely that price is always an important part of the equation when contemplating a purchase and that if the prospect isn’t asking it might be a warning that they’re not really that serious about actually buying a solution.
I also really like the way you’ve characterized the salesperson’s dilemma: 1) always answer your prospect’s questions honestly and directly, and 2) never discuss price until you’ve built value in your product or service.
My favourite way to deal with the price question asked too early is… “Well, Mr. Prospect, we haven’t done enough due diligence yet to know for sure, but our product/service ranges in price anywhere from X to Y. BUT, if I were you, I wouldn’t spend a dime on it until we figure out how much $$$ it will either MAKE you or SAVE you, or both. Based on what you’ve learned so far, how is this going to make you money?”
This approach takes the pressure off both the salesperson and the prospect when the money conversation is taking place early in the discussion.
- Craig
Craig DesBrisay
craig@audaxium.com
http://www.audaxium.com
Comment by craigdesbrisay — May 31, 2011 @ 9:32 am |
Craig,
I think the admonition to not buy unless the anticipated payoff is known is both great advice and a strong transition back to the business of discovering needs.
Comment by Paul McCord — May 31, 2011 @ 10:34 am |
Another strategy is to consider the good, better best approach especially for those who offer professional services.
Price is a valid concern, but as a sales objection ranks number four after you, your company and your solution.
I too have used the range strategy when I do not have enough information. Sometimes this gives you a little insight as to where a potential customer might flinch respective to your prices.
Leanne Hoagland-Smith
Author of Be the Red Jacket
Comment by Leanne Hoagland-Smith — May 31, 2011 @ 9:46 am |
I agree, Leanne, using the range as an answer addresses the question honeslty and, as you point out, sometimes gives an idea of what the prospect may be thinking in terms of anticipated price which is always good to know.
Comment by Paul McCord — May 31, 2011 @ 10:36 am |
I’ve always found that answering the prospect with the following question either sets up the close (prospect is ready to buy) or settles them down and get’s us back on track:
“Mr. Prospect, do you know enough about the product/service to determine that this is the right solution for you if the price is right?”
Sometimes they have already done the research and are 5 steps ahead of you in the sales process. Other times, the price question is a reactive one and this is a great way to regain control.
Comment by Michael Pedone — May 31, 2011 @ 10:29 am |
Michael,
I think your question works well and certainly allows the prospect to move at an advanced pace if they wish. I’m not sure, however, that when they ask the price question that we’ve lost control of the sale, it’s just a natural thing for prospects to want to know while they’re qualifying us, they just ask it too soon. I don’t think its moving from that question to regaining control of the sale as much as it is clarifying where the sales process is really at.
Comment by Paul McCord — May 31, 2011 @ 3:05 pm |
I agree… you DO have to answer the question rather than bypassing it. I’ve seen sales reps use the ignore tactic, and THAT does not work! As you mentioned, I always use a range and a “depending on…” statement. I may also add something like, ” I don’t mean for that to be a vague answer, I just need a little more information to be able to give you an exact price since we have so many different options that might fit your needs.” The prospect knows that I am not avoiding or dodging the question; they understand that it’s just too early for me to be able to give them an accurate answer. Wide-ranging ballparks are also a good way to answer the question… sometimes the prospect really just wants to make sure that you’re talking about a $2K-$5K solution as opposed to a $20K solution!
Lisa Sperow
http://www.CloneMyTopSalesReps.com
Comment by Lisa Sperow — May 31, 2011 @ 10:50 am |
Great article! Thanks. Especially like the point on the need of the customer to qualify us, just the same as we try to qualify them.
Comment by Aaron — May 31, 2011 @ 2:30 pm |
Thanks, Aaron. We often forget that we’re not the only one in the sale and that the prospect is just as busy qualifying us as we are them. Unfortunately many times the prospect is more descerning and demanding in the qualifying process that the seller.
Comment by Paul McCord — May 31, 2011 @ 3:01 pm |
[...] I wrote an article titled “How to Take the Sting Out of the Price Question Early in the Sale.” In the course of the article I argued that it is natural for a prospect to ask about [...]
Pingback by Hey, Now, Just Who’s Qualifying Whom Here? « Sales and Sales Management Blog — June 3, 2011 @ 10:10 am |
Good advice, and you certainly want to establish your value proposition before suggesting a price the customer would balk at without preparation. But if your least expensive product/service costs $100K and your customer can’t spend more than $10K, it’s good to know this so you can move on to other opportunities.
To a large degree, sales is a time management process. We want to spend time with the prospects who are qualified and motivated to buy, and minimize time spent with those who are not.
Comment by Semantic Advantage — June 12, 2011 @ 4:00 pm |
[...] Qualifying Whom Here? June 23rd, 2011 InternetRSSFeeds Recently I wrote an article titled “How to Take the Sting Out of the Price Question Early in the Sale.” In the course of the article I argued that it is natural for a prospect to ask about [...]
Pingback by Hey, Now, Just Who’s Qualifying Whom Here? | InternetRSSFeeds — June 23, 2011 @ 10:41 am |
Paul, what i feel and completely agree on that price is always an important part of the equation when contemplating a purchase and that if the prospect isn’t asking it might be a warning that they’re not really that serious about actually buying a solution.
fantastic article.
Jake.
http://www.TheMotoring.com
Comment by Get Motors — July 14, 2011 @ 4:42 pm |