Written by Sean McPheat |
You know the situation. You’ve highlighted the value of your products and services and done everything possible to help the prospect see the benefits of dealing with you. And yet you still get the response that you’ll have to do something with your price.
Even though there’s no doubt that your product or service is worth every penny you’re asking, you also know that there are competitors out there ready to sell their grandmothers at a discount to get the sale.
Winning the sale at any cost may be appealing, but you know the results of playing the price game: you’ll eat into profits, your margins will be chomped away and you will set a precedent with this customer that says you’re willing to lay down, roll over and well and truly fleeced. And whenever a lower offer comes along, where’s this loyal customer going to go? Over the nearest hill faster than you can say ‘what-did-I-do-wrong?’.
To solve discounting at any cost you need an integrated, cross-functional approach to develop and deliver compelling whole solutions for your prospect’s business. Think in terms of being a solution provider rather than a product provider. You’ll win some and you’ll lose some, but you will have kept the integrity of your services without being slapped down on price.
Here are three ways to deal with the price-sensitive decision-maker:
Make sure you know the value of your products and services and how it links to the customer’s business situation.
Many salespeople we work with know the first part of this equation but fall short when we ask about the second part.
You must understand the departments that are most affected by your solution, and the financial impact of your solution on the various decision-makers and key affected areas of the business.
This takes time, energy and research, but the hard work will pay off big time, because you’ll be speaking the language that the buyer understands: the effects on the business strategies and results.
Make sure you can help the customer calculate the cost of not using your solution.
Before you can offer a remedy, you must be able to firmly establish the costs of not using you and your solution. You must help the customer identify business symptoms of his problem and show him the long-term results of not changing. This will automatically increase the value of your solution, as there will be a measure of ‘pain’ associated with the current situation.
All people make decisions for one of two reasons; either to resist or avoid pain, or to achieve gain. Change will not occur until an individual or company recognises that the pain of change is less than the pain of staying the same.
Make sure you can explain the impact of your solution over those of your closest competitors.
Here, you have to be specific. If you can explain or prove how you have saved money for another company or made someone else’s life better with your solution, you start to nullify the impact of the competitors’ offers.
This is where the customer/prospect’s thoughts of price will be overshadowed by the residual benefits to the business of choosing your solution. You highlight the advantages of longer-term costs over initial, up-front price. The specific financial impact that your solution will offer has to outweigh the price to make business sense to them. When it does, the concept of going for the cheapest price starts to look a little shaky.
These three ideas won’t work every time; there will still be the minority who will always choose the cheapest option. However, they have to also accept the consequences attached with taking this risk. And all you can do is to be there when they have to pick up the pieces.
Originally published: 18 September, 2014