Getting a better price than your competitor is all about knowing what the prospect is willing to pay extra for. This is usually not obvious, and many times the prospect is not even aware what it is. But most salespeople ignore digging deeper to uncover the secret motivator. However, to have the assurance you can deliver it, the prospect must realize s/he want it and you know what it is s/he is willing to pay extra for.
If your features look the same as the competitors, why pay extra. One pays extra for benefits, not features. If you know the real benefits this buyer is looking for and you can show him or her you can deliver better than or as well as your competitor, you’ll get your price.
Price is an excuse. If the prospect doesn’t perceive the benefit for him or herself, even free is always too high. Buyers will usually ask for a better price or look for a sale, but, the price is not what’s holding them back. Getting g that extra with assurance is.
Most of us want the prospect to get excited with exactly what we have and be willing to pay our price. The problem here is prospects usually don’t know what they want and would just like to get rid of you. Price or “Can’t afford it,” is usually a good way to do it. If prospects really knew what they wanted and what it was worth to them, they would be calling you and telling you roughly the price they would be willing to pay. The job of a good sales person is to lead them with questions so that both of you can figure it out.
The Quick Fix
If you just want a quick technique, try this. When the prospect says the price is too high, assume it is an excuse. Don’t suck-in. Just say, “OK, what else. You might learn something interesting.
The 5 Step Price Justification Process
Don’t give your price before these steps or you’ll rarely have what’s needed to justify your price.
First – qualify there is a legitimate interest, a problem, a challenge, issue, desire, etc. before talking price. Don’t assume, “They all want the same thing.” Even if they do, this prospect has to tell you, otherwise s/he won’t know that you indeed do know.
The next key question is, “Why is it a problem or desire?”
If the prospect is unwilling to answer these questions, she is probably just shopping you such as a purchasing agent would do.
- Second – Ask, “What happens if you do nothing?” If there is no real pain or pressure to do something about it, the prospect is not going to pay any price. Move on to the next prospect.
- Third – how would s/he want to solved the problem, or at what price? Many want the solution, but they don’t want to do it your way or at your price. So ask, “If you could wave a magic wand, how would you eliminate this problem (or attain this desire)?”Again, don’t give your price until you’ve pulled out the information. If you do, they have what they need and you’ve lost control. The irony is; if you keep them talking about what they want, they will keep talking and be happy to do it. This is where you learn the real motivators.
- Fourth – When finished and before giving the price, ask how, “How do you feel (not “what do you think”) about what I just told you?”
- If s/he feels good, you’ve made your case and now give him the price.
- If s/he is not overwhelmed, ask, How come?” If she does not feel good, she is not going to buy no matter the price.
- Fifth – If your price is worth the “benefit”, but there is still resistance, then something else is holding the prospect back. Draw this out and let the prospect tell you how to eliminate his concern. i.e. Ask, “What would I have to do to make you feel better about eliminating this concern?”
- If s/he says, “Lower the price.” You say, “How much? What else?” or “How come you feel the price is too high?” ….. Then, again, say, “ What else?”The above five steps take confidence, know-how, discipline, and practice. These steps also require more time to execute initially, but save hundreds of hours of anxiety and dying slowly.