The Price Trap

SQC smallProblem: One of the most frequent complaints we hear from business owners, sales managers and salespeople is the following: “Price is the primary focus of the sale these days–all of our prospects want the lowest price.” It starts out innocently enough. Buyers lead with questions and comments like these: “How much is it? Can you give me a quote?” As the sales discussion proceeds it gets more intense: “That seems like a lot.” or “Why is it so expensive?” or “I saw it for less.” Salespeople often respond by cutting price thus giving away margins and commissions.

Analysis: People who sell hear about price so often that they expect the conversation to dwell on price and they tend to overreact to price concerns. Sixty-eight percent of salespeople from a wide range of industries thought that price was the main concern of the customer based on a recent survey conducted by The Sales Board. In contrast, when customers were asked what was most important to them in a purchase their response was much different. The majority of people were more concerned with quality, service and relationship than price.

Solution: To get out of the price trap, you have to stop focusing on it. The only time price is the main issue is when there are no other factors that are important which is rarely (maybe never) the case. The next step is to differentiate yourself and your product so that the prospect does not focus on price. That means not giving feature and benefit presentations–which cause you to look like every other salesperson.

Instead, change your approach in a couple of ways to focus on the prospect and her challenges and not on your product. First, suggest to your prospect that it’s important to establish an environment where you can explore the details about the prospect’s situation.  Mention to the prospect that your “biggest concern” is that their focus will be on price and that addressing the real issues (pain) will take a back seat to price. By addressing the price issue early on, they will tell you where price fits into the decision-making criteria. Experience shows that it will become secondary if you are successful in refocusing the discussion to the prospect’s pain.

Next, lead an interactive discussion to understand the emotional reasons behind the prospect’s situation and uncover the pains that need to be addressed. By doing this, you and the prospect will mutually discover if there is value in your product and remove the emphasis on price.

Here is another response to refocus the conversation when the prospects ask you about your price too early in your sales process. “I’m not ready to go there quite yet because I haven’t figured out if we can even help you. I have a few more questions before we get to talking about the investment needed. But let me make you comfortable with that.  I haven’t lost anyone over price and I guarantee you won’t be the first.  Now can I ask you about…”

Good Selling!!