If you offer the best product and you completely understand your prospect’s use case, you’ll win the sales deal, regardless of cost. Period.
But that’s not to say your prospect won’t give you a hard time about the price tag. I mean, buyers are only human. We all want to get the best deal. And there’s no harm in asking, right?
The rule I adhere to is the sooner the prospect knows your price tag, the better. That way, you can disqualify them early on if they don’t have adequate budget and then you don’t spend time with someone who can’t buy. During the sales process it is your job to collect the right information to deliver your value proposition and the ROI of adopting your product.
The thing you want to avoid most of all is sticker shock right before the closing stage. At that point, both parties have invested time and effort into the deal, and if it can’t move forward because of cost, frustration often bubbles over.
So how should you talk about price during a sales engagement? Here are my tips for addressing the cost of your product or service with three buyer archetypes: the influencer, the champion, and the decision maker.
The influencer might be in charge of running the RFP or they could be the person who gives advice to the decision maker. The influencer can also be a champion and understanding their personal investment in your solution is crucial.
If the influencer starts to gripe about price, ask a question to uncover why that is. Because the influencer has the power to sway the decision maker’s mind, you’ll want to understand where their concerns are coming from.
With the influencer, ask probing questions to get to the real issue behind the price objection. Here are some I keep on hand:
- “Is it really the price you’re concerned with, or are you simply looking for the best deal?” If they respond with the latter, you can reframe the issue in terms of value. For the value, your product is the best deal — even if the price tag is a bit higher.
- “Are you concerned about the return on investment?” You should have already calculated ROI in hard numbers. Refresh the influencer’s memory. Show them the ROI analysis right before you show them the price.
- “When was the last time you bought something solely based on the lowest price?” If they’re truly looking out for the interests of their business, probably not recently (or ever). Point to other systems or products you know they are using. If it sounds like all the other tools they use are the Cadillacs of their respective industries, you know that the influencer sees value in getting the best product regardless of price.
The champion is on your side. She wants to buy the product, and is working on your behalf to get the influencer and decision maker to see things her way. However, understanding the company org chart is crucial because a champion without any pull is of little to no value to you.
If you’ve coached the champion correctly, you will have fostered a high level of trust. With this in mind, you can use the champion to get the inside scoop on the pricing battle:
- “If my service was the same price as all the others which would your boss choose?” If the champion says yours, ask for the signature today. If not, try to understand why — have they used a different vendor in the past? Have they gotten incorrect information from a competitor? Get the decision maker on the next call and reposition yourself while taking their temperature.
- “What are the other competitors offering in terms of price?” Depending on where your company falls on the spectrum, you can talk with your manager about offering additional services. Most sales reps look to offer a discount whereas I believe if you know the champion well, you should be able to offer them more value at the same price.
The Decision Maker
You can’t give the decision maker the price runaround during the final negotiation. I advocate spelling out your price and sticking to it.
Remember that the mute button can be your friend. State the price and hit the mute button so you can totally understand their initial reaction.
However, let’s say the decision maker is still hemming and hawing. Don’t jump to a discount immediately. Instead, pull out some of the freebies you’re authorized to offer. Oftentimes, this is enough to sway the decision maker and get a signed contract in hand.
If the decision maker is still unconvinced even after you pull the final freebie lever, consult with your sales manager. But in general, if you’ve qualified the prospect correctly, price shouldn’t be an issue at this late stage. Take this as a lesson to discuss decision criteria more clearly up front.
How do you recommend talking about price with your prospects? Share your thoughts in the comments.