Why You Aren’t Selling
Are you a salesperson struggling to close deals because of price sensitivity from your prospects? Do you want to learn how to set price expectations early in the sales process, so your prospects aren’t shocked when you mention the final price? If so, this article is for you.
Coach Nate here, and today I’m going to share some valuable insights into how to set price expectations effectively. As a salesperson, you must know that price is not always the prime selling tool. Instead, you should focus on selling a quality product or service at a fair price.
Does Your Prospect Value Quality Over Price?
It’s impossible to offer the lowest price and still provide quality products or services, competent after-sales support, advertising and marketing campaigns, and continuous product and skills training. Therefore, if your prospect is only interested in the lowest price, you may not get the sale. However, if the prospect values quality over price, you stand a better chance of adding another satisfied customer to your list.
How Can I Tell?
The first step to setting price expectations is to assess the prospect’s facilities. If the building, equipment, and office furniture (house, car or furniture for residential sales) are in good condition, the prospect is likely to consider value before price. On the other hand, if the facilities are outdated or in need of repair, the prospect may be price-sensitive and prioritize price over value.
When and How to Set Price Expectations
You can set price expectations with the prospect during two critical points:
- Pre-visit qualification
and
- The actual sales call itself.
Pre-visit Qualification
Remember, your purpose here is to qualify the potential prospect. Not to just try to sell to everyone that expresses interest. Don’t try and pull a fast one on your prospects – be honest, be genuine, and most importantly, be confident in the value you’re offering. When you do that, you’ll attract the right customers, the ones who are ready and willing to invest in themselves and their goals.During the pre-visit qualification, you can mention the low price method, where you inform the prospect that the prices typically start at a certain amount. Alternatively, you can use the price range method, where you mention that the prices range from a particular amount to another.
Low Price Method:
Now, some salespeople might try to hook you in with a low price just to get you in the door, but let me tell you – that’s not the way to do it.
Instead, picture this: you’re the salesperson, and you’re sitting down with your prospect. You tell them straight up, “Hey, I can’t give you a price until I really understand what it is you need. That’s why this meeting is so important.” But then, my friend, you drop a little hint – “Prices usually start at around $AAAA. Is that something you’re comfortable with?”
Now, here’s the key. You’re not trying to lowball them, or trick them into coming in. You’re setting the expectation right from the get-go. You’re showing them that you’re serious about finding out what they need, and that you’re not going to try and sell them something they don’t want or can’t afford.
Price Range Method:
Avoid giving a specific price upfront, it is dishonest and inaccurate. It’s just setting you up for failure. Use the price range method instead.
Picture this: you’re the salesperson, and you’re sitting down with your prospect. As mentioned above, you tell them straight up, “Hey, I can’t give you a price until I really understand what it is you need. That’s why this meeting is so important.” This is where you throw in the range – “Prices normally range between $AAAA and $ZZZZ, with $MMMM being about average. Does that work for you?”
Now, here’s the thing. You’re not trying to pin them down to a specific price. You’re giving them an idea of what they can expect. You’re showing them that you understand their concerns about cost, but that you’re not going to compromise on quality or value.
The Actual Sales Call
During the actual sales call, it’s wise to reinforce the price expectations you’ve already set earlier. If you know that the prospect has received or will receive more quotes, mention that your price may not be the lowest. If you’re not sure of the competitive situation, emphasize the quality of your product or service and how competitive your prices are.
If you know the prospect has received or will receive more quotes:
Here’s the deal: you know the prospect is considering other quotes, and you need to find a way to stand out from the crowd. So, you start off by saying something like, “Hey, remember when we talked on the phone? I mentioned that prices for our products or services are likely to range from $AAAA to $ZZZZ, but I want to be clear – I won’t be able to give you a firm price until we determine exactly what you need.“
Now, here’s where it gets interesting. You need to address the elephant in the room – the fact that your price might not be the lowest. But instead of trying to beat the competition on price alone, you need to focus on the value you bring to the table.
You say something like, “Look, I know this is a very competitive business. There are a lot of companies out there who are willing to cut corners on quality, after-sales service, and other things that might not seem important until you really need them. But we’re different. We have a reputation for quality, and we’re simply not prepared to cut corners.”
By saying this you’re showing the prospect that you’re not just interested in making a quick sale – you’re interested in building a long-term relationship. You’re showing them that you understand their concerns, and that you’re willing to go above and beyond to deliver the best possible product or service.
If you’re not sure of the competitive situation:
So, let’s say you’re not sure of the competitive situation. Maybe you don’t know what other companies are charging for similar products or services. That’s okay – you don’t need to know! Instead, focus on what you do know – the value you bring to the table.
Just like above, start off by saying something like, “Hey, remember when we talked on the phone? I mentioned that prices for our products or services are likely to range from $AAAA to $ZZZZ, but I want to be clear – I won’t be able to give you a firm price until we determine exactly what you need.”
Now, here’s the key: instead of worrying about the competition, focus on the value you bring to the table. You say something like, “Whatever the final price may be, you’ll find it very competitive. And when you take into consideration the quality of our product or service, the after-sales service we provide, and the personal attention I give my customers, you’ll see that we truly stand out from the crowd. We have a reputation for quality, and we don’t cut corners.”
By saying this you’re showing the prospect that you’re confident in the value you provide. You’re not worried about what other companies are charging, because you know that you offer something special.
Don’t Scare Them Off
It’s essential to set price expectations professionally without scaring off the prospect. The aim is to manage their price expectations and avoid sticker shock, making them more receptive to your value-based approach to solving their problem. If you set proper expectations, and the client still doesn’t buy, they weren’t likely ever going to buy. However, because of your professionalism and value added conversation with them, the potential prospect will hold you in high esteem. Whether you know it or not, this will likely lead to that prospect referring you to friends and family that they know are value focused.
Wrapping this All Up
As a salesperson, you must set price expectations early in the sales process to avoid shocking your prospects with the final price. Use the methods mentioned above to manage their expectations, emphasize the value of your products or services, and close more deals. Remember, if the prospect cannot see the value, any price is too high. So, go out there and close those deals with confidence!
Looking to up your sales game, try The Power of Selling Benefits!
The Sales Blog | Professional Selling | Sales Management | Essential Tools and Tips SalesTrainers.ca