Prospects/customers want several things from their suppliers. Fair price, quality products and services, and timely service (not in order of their preference). Surveys of consumers say that most consumers want: timely and responsive service first, quality products and services second, and low price third. For over thirty years, I have surveyed my sales audiences and asked them what they think is most important to consumers, and the results have been consistent: low price first, quality and service last. We seem to have a difference in perception here!
There are three elements that must be understood by salespeople if they are going to effectively deal with the price issue. First there is price. That is what people pay for what they buy. Second is cost. That is what they pay for what they buy, over time. And then there is perceived value. That is what they want for the money they pay.
Most consumers tell salespeople that what they want is low price - when what they really want is low cost. Now I know that many of you will take issue with this statement, but I only ask that you consider for a moment what you as a consumer want. Do you want the cheapest, or that which solves your problem or answers your need or desire? Most prospects or customers want their problems solved. They know that you get what you pay for, and that the distaste of poor quality lasts far longer than the sweetness of low price.
People object to price when they feel that what you are asking them to pay is higher than their perceived value. Most poor salespeople, when they get price resistance, lower the price. Most of the time, it is not a price or cost issue, but one of too low perceived value. How do you raise perceived value? Find out what is preventing your prospect or customer from getting a good night’s sleep, and show them how your product or service will satisfy this need/want, or, even better, exceed their expectations for value. I guarantee you, price will be secondary. Not cost, but price.
The real sales pros focus on value - what the product or service does for the customer - and not price. They understand that price is an issue, but not the most important one. Price will always seem high when perceived value is low. The way to change the relationship between price and value in the other person’s mind is to raise value. Lowering price only makes them question your original price, as well as the lower price, with suspicion.
It should therefore be obvious that you never want to introduce price too soon in the sales process - until you have had the opportunity to build value in the prospect’s mind. If you have a price-only buyer (they are out there), you must decide if that business is worth it to you in the long run. I can only tell you from experience, the prospects who made a big deal out of price and expected all kinds of price adjustments ultimately required a lot of other concessions as well. Use their attitude about price and cost as a barometer to the overall quality of the relationship in general.
There are three elements that must be understood by salespeople if they are going to effectively deal with the price issue. First there is price. That is what people pay for what they buy. Second is cost. That is what they pay for what they buy, over time. And then there is perceived value. That is what they want for the money they pay.
Most consumers tell salespeople that what they want is low price - when what they really want is low cost. Now I know that many of you will take issue with this statement, but I only ask that you consider for a moment what you as a consumer want. Do you want the cheapest, or that which solves your problem or answers your need or desire? Most prospects or customers want their problems solved. They know that you get what you pay for, and that the distaste of poor quality lasts far longer than the sweetness of low price.
People object to price when they feel that what you are asking them to pay is higher than their perceived value. Most poor salespeople, when they get price resistance, lower the price. Most of the time, it is not a price or cost issue, but one of too low perceived value. How do you raise perceived value? Find out what is preventing your prospect or customer from getting a good night’s sleep, and show them how your product or service will satisfy this need/want, or, even better, exceed their expectations for value. I guarantee you, price will be secondary. Not cost, but price.
The real sales pros focus on value - what the product or service does for the customer - and not price. They understand that price is an issue, but not the most important one. Price will always seem high when perceived value is low. The way to change the relationship between price and value in the other person’s mind is to raise value. Lowering price only makes them question your original price, as well as the lower price, with suspicion.
It should therefore be obvious that you never want to introduce price too soon in the sales process - until you have had the opportunity to build value in the prospect’s mind. If you have a price-only buyer (they are out there), you must decide if that business is worth it to you in the long run. I can only tell you from experience, the prospects who made a big deal out of price and expected all kinds of price adjustments ultimately required a lot of other concessions as well. Use their attitude about price and cost as a barometer to the overall quality of the relationship in general.
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By Tim Connor
Tim Connor, CSP is an internationally renowned sales, relationship, management and leadership speaker, trainer and best selling author. Since 1981 he has given over 3500 presentations in 21 countries on a variety of sales, management and relationship topics. He is the best selling author of over 60 books including; He can be reached at tim@timconnor.com, 704-895-1230 or visit his website at http://www.timconnor.com
Tim Connor, CSP is an internationally renowned sales, relationship, management and leadership speaker, trainer and best selling author. Since 1981 he has given over 3500 presentations in 21 countries on a variety of sales, management and relationship topics. He is the best selling author of over 60 books including; He can be reached at tim@timconnor.com, 704-895-1230 or visit his website at http://www.timconnor.com
