What to do when you’re asked the price
Many people are taught as salespeople, not to give the price until the last minute. The idea is that you need sufficient time FIRST to explain all the benefits of your product or service. That makes sense to a degree. Certainly if the prospective customer doesn’t ask the price or the fee, then I’d suggest you carry on, until such time as the price becomes the appropriate next step.
However, what if they ask you the price – directly during your pitch?
Most of the time buyers are savvy and may know what your prices are, or what your competitors are charging, or they may simply have an expectation about about the price. But if they ask you a direct question, it is rude to ignore it and so you’ve got to respond is some way. If what you sell is some form of consultancy or service, then it makes perfect sense to say “I can give you a ball park figure. It is likely to be somewhere between x and y. However to give you a firm idea of the price, we will need to do ……..”
However, I recently came across an article that gave firm reasons why you should still NOT reveal the price until the end. I’m not necessarily saying I agree with these points, but nevertheless I offer them to you as the contrarian view. Consider this.
Here three critical reasons why you should never reveal the price until you have built value by selling the relevant benefits.
1. Price is Irrelevant Until You Have Established the Value to the Prospect
For your product or service to have any value to the prospect, the prospect must have a NEED for that product or service. Before you can establish a need, there must be a solution. Before there can be a solution, you must unearth a problem. The significance of the problem for which the product is a solution, determines its value. Until there is such a value, the price is meaningless. The following analogy, though absurdly fictitious, will help demonstrate the point.
If I offered you a consultancy-based service for an annual fee of £10,000 you may consider that expensive and not worthwhile. After all your business is doing ok as it is. However if I demonstrated (and you accepted) that the service would save you £25,000 per year or increase sales of £25,000 p.a., then the £10,000 seems like a bargain. So it’s all about value, not price.
2. The prospect often switches off when they hear the price
Once you reveal the price, the prospect makes a buying decision. They now feel that they have all of the information they need. “What benefit am I going to get, and how much will it cost me?” If the decision at that point is negative, it’s difficult to recover your position. The prospect now has a closed mind, and considers any additional information unnecessary. It you’ve not done a thorough job of selling the benefits and building value, before this point, then it’s too late anyway. Which leads me on to the third point……
3. Price Before Value Creates a False “Price vs. Value” Perception
Theoretically, we’re all taught that the sale takes place when the value exceeds the price in the prospect’s mind. After all, it is frequently not about money. It is about emotion. Does the prospect consider the value they are getting? You’ve revealed the cost (the negative part of the equation), but not the positive bit the value.
Looking at it another way, if you build the value before talking about the price, in the prospect’s mind that price will be greater than the value. If you have done a good job building value, then when you finally reveal the price, it should be less than the value. Therefore, the prospect perceives the price to be less than they expected and hopefully you have the chance of winning the sale.
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