If you’ve been in sales for any amount of time, you’re striving to be fearless.
You’re the type to knock down doors, make a hundred calls, strike up conversations with multiple strangers at networking events and work a crowded room full of C-Suite executives without breaking a sweat.
That is, until someone starts asking pricing questions.
Even the most seasoned of veterans can relate to that pang of anxiety you feel when it’s time to talk about the sale price.
In this article, we’ll share how to convey your prices confidently, deal with competitor pricing questions and ultimately overcome the fear of talking about price.
The pricing conversation is crucial and necessary to the sales process. It’s really just another natural step in your prospect’s buyer journey. At some point they are going to want to know “how much?”
If the salesperson is nervous talking about the price, the prospect may start to feel like they are “getting sold to”. This could lead to the prospect potentially feeling on the defensive, leaving you to wonder if they have the budget for your services, or, if your pricing strategy and pricing models need to be optimized.
Before you succumb to a pricing fear spiral, let’s get one thing straight: you are responsible for directing the sales pricing conversation.
By owning the topic, you effectively take the tension and awkwardness out of the situation for both parties. If you lose control of the conversation and shy away from difficult pricing questions, then it becomes near impossible to position yourself as a consultant rather than just a vendor taking an order.
If you are in the trenches having these conversations, or you manage a sales team struggling with talking price, knowing how to overcome sales objections and pricing barriers will help you form better relationships with prospects and close more deals.
The saying “price only becomes an issue in the absence of value” holds true in all things.
It is your job to demonstrate the value you bring using proof points, not just financially, but in your overall service offering.
If your prospect is sold on value, price becomes irrelevant. Remember, you are a problem solver and value creator, not a hawker or a bartering vendor.
Author and Sales Coach, Anthony Iannarino explains why leading with your value propositions can make your pricing conversations run so much smoother:
“Make sure you highlight all of your differentiators to create enough value that even though your price may be higher, your results in fact generate a greater return for your client.”
When you use your differentiators, as Iannarino explains, you set yourself apart from your competitors.
Great salespeople differentiate with the intangibles. The commitment to excellence, to constantly improve and to proactively support customers translates into commitment to serve the client and their business. In other words, a commitment to provide a great customer experience.
Find the absolute value you bring to the table, and communicate these non-monetary differentiators to help you take the pressure of the price tag.
The best way to handle premature pricing questions is to point out that pricing depends on their unique needs. Explain that there are different price points and costs may be dependent on sales volume, functionality, level of customer support required, add-ons and other variables.
Make it clear you need some more information before you can give an accurate quote. Own the pricing conversation on your terms and ask follow- up questions to gain a better understanding of their business, what they do, how they do it and why they do it to put together a thorough quote.
Providing a blind quote upfront puts you firmly in the “just another vendor” category. Instead, you want to position yourself as an expert and a trusted adviser.
To do that, you need to start making a connection with the prospect by reframing the conversation to focus on value instead of cost.
For example, you can ask your prospect if they currently use a similar product or service as yours and how much they pay for it. Then, ask them why they are in the market for a new offering. This answer should give you some key information about what their problems and pain points are, so that you can frame your solution as the answer to their unique experience.
If their existing solution is too expensive for them, and you have a first tier offering that is less expensive than what they currently pay, that could be a great place to start.
If price is at the forefront of your prospect’s mind, lean on open- ended questions to help you plan your next step forward.
This depends entirely on the sales insights you uncovered about your prospect during lead qualification. If you know they have a sufficient budget, pricing sales conversations should not scare them off. But if you’re unsure, you could run into some early hurdles.
In general, price is often most important at these two points in your sales funnel:
During qualifying. Before you spend valuable time with a lead or prospect, you need to understand if they have the budget for your solution. This will help you determine if they are worth pursuing, when you can bring up pricing and if you’ll face pricing objections.
During closing. Here, you need to understand how your pricing compares to the competition, and what your product or service’s perceived value is. This will help you understand how much room you have in negotiation and assess opportunities vs. risks when it comes time to close the deal.
By properly qualifying your prospect, you’ll know whether they have the budget to spend, and, importantly, if that budget is available within the current sales cycle. This helps you lay the groundwork for the value you can add relative to their budget.
Take advantage of cognitive biases (i.e. subconscious preconceptions) to keep the conversation neutral.
Human Behavior Coach, Beverly Flaxington has said when it comes to Understanding the Mind of the Buyer, sales reps need to:
“Resist the urge to ‘overcome objections’. When it comes to offering resistance, most people want someone to acknowledge their resistance—not barrel through it!
If a prospect gives the objection ‘There is too much going on here right now. I can’t even focus on this’, it’s not your role to show them how they can focus on it. It’s your role to understand what’s happening with them, respect it and see if it is a ‘movable’ obstacle or not.
You can only do this if you learn how to probe and operate with a true desire to understand the mind of your buyer.”
When it comes to pricing, sales reps should put themselves on the same side of the table as their prospects. Listen to them, really hear what they are saying and take note of any resistance or potential obstacles they start putting up. Make sure you acknowledge and continue to ask probing questions until you get to the real issue. Then, address it directly.
Mike Weinberg, The New Sales Coach and bestselling author of ““Sales Management. Simplified”, gives great advice on this topic:
“Be THANKFUL that you have a higher price because that equals job security. Why? Well, because if you have the lowest priced piece of junk then they wouldn’t need highly compensated salespeople to sell it now, would they?”
He also gives you some strategic advice to help you manage this situation effectively:
“Our job as professional sellers is to justify the difference between our premium price and the market price.”
If a prospect says your price is higher than the competitions, Weinberg says to respond with something along the lines of the following:
“I hope so! There are a number of reasons why we are, and that's why a number of (similar companies in their space, known names etc) have chosen to trust us with their business.”
In other words, competitive pricing is a great thing. Use it to your advantage to show your differentiators and display the value of your offering so you can prompt the prospect to reconsider their perspective.
For example, if your product has set prices, confidently state the full price without offering any discount pricing or stating that this is “my best price.”. Assuming you did your market research and qualified the lead well, you will be talking to a prospect who can afford to pay for your services without asking for a lower price.
The price of your product is one of the most crucial aspects of your sales and marketing strategy.
Whether you are a small business owner running an e-commerce store, an experienced sales rep in B2B sales or a startup entrepreneur launching a mobile app, you must learn to take control of the pricing conversation.
When it comes to pricing, sales reps should never shy away from the conversation. Instead, by portraying confidence in your offering and pricing, potential customers will be impressed by your differentiators and value adds.
If they still don’t have the budget to meet your pricing, sales reps categorize them as a cold lead and clear them from the active sales pipeline. If and when the time is right, you can revisit their account in your CRM and send a follow up message to see if their budget has changed, or to share information about a new product that is in their original price range.
Remember, low prices do not necessarily increase sales and high prices do not mean you will find it difficult to sell. Focus on acquiring new customers who can afford your product at the list price.
When the prospect does have a budget, if you’ve communicated the value of your offer, you’ll be the first number they call.
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