Sales and Sales Management Blog

April 8, 2013

Handling the Price Question and Building Trust–They’re Not Incompatible

Filed under: Uncategorized — Paul McCord @ 10:39 am
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“So, how much will it cost?”

“What would something like this run me?”

“We have a very limited budget.  I don’t want to waste my time.  What’s your fee?”

“Sounds to me like you’re talking about a lot of money.  Before we go any farther I need to know what kind of money we’re looking at.”

We’ve all heard these questions and a million variations of them.

They always seem to come well before we’re prepared to discuss dollars, most often before we have had the opportunity to figure out what specific issues we’re dealing with, and always at an inopportune time.

The fact is that no matter what you’re selling, the price of your goods and services is always a primary concern to your prospects. Whether you like it or not, price is top of mind with the majority, if not all, of your prospects.  If it isn’t, you might need to question just how serious your prospect is since price is always an important part of the equation when contemplating a purchase.

The fact that prospects are concerned about price isn’t a surprise and it really shouldn’t be a big deal—except it so often comes up before you’ve had any opportunity to establish the value you bring to the table for the prospect– and price without value equals a no sale.

The price question presents you with a serious dilemma:  how do you honestly answer the question of price, yet at the same time save a detailed conversation about price until you have had the opportunity to discover needs and issues and to build the value in your product and service that justifies its price?

The early introduction of the price question seems to put you in a position of having to choose between two rules of selling that appear to be antithetical to one another at this point: 1) always answer your prospect’s questions honestly and directly, and 2) never discuss price until you’ve built value in your product or service.

Fortunately, you can honor both rules.

The key to addressing the price question is understanding why the question is asked in the first place.  Many salespeople see the price question as an objection; it usually isn’t.  It’s an honest question by the prospect who is trying to determine their interest level in your product or service. 

Just as you are trying to qualify your prospect, they’re trying to qualify your product or service, as well as qualifying you, and one of the major qualification questions they have is price.  They’re simply asking the question too early, before they have sufficient information to determine whether your product or service justifies the investment.

The easiest way to handle the question is to give the prospect a direct answer and then bridge back to your investigation of their wants and needs to build value.  Depending upon the product or service you’re selling, your answer to price may be specific: “This truck is twenty five six fifty four”; or general: “depending upon your specific needs we find when we do the needs analysis, the complete instillation of the software and training can range from a few thousand dollars on up into the low to mid five figures,” or, “Frankly, Jack, at this point I really don’t know because I don’t know what needs to be done, if anything, but I can tell you that the investment can range from just a few thousand dollars on up.  But it depends upon the scope of the work to be done and that’s still to be determined.”

Your statement then needs to be immediately followed up with a question to bridge back to investigating their needs to help you build value.

In the truck example above you might then ask, “Will you be pulling a trailer often, or just on occasion?”  In this example your full statement would be, “This truck is twenty five six fifty four.  By the way, will you be pulling a trailer often or just on occasion?”  You’ve answered your prospect’s question, but you then lead them back into a discussion of their needs, which will help you determine what vehicle will best meet their needs, give you information to highlight the features of the truck that will meet those needs, and the benefits of those features that will give value to the price of the truck.

In the software example, the full statement might be something like:  “Well, Nancy, depending upon your specific needs we find when we do the needs analysis and the modules you need, the complete instillation and training of the software can be anywhere from a few thousand dollars on up to the low to mid five figures; by the way, what other applications do you run that our software will have to be integrated with?”  Again, you’ve given an honest answer to the price question since at this point you don’t know what the package will cost.  Instead of trying to answer an impossible question, you’ve given the typical cost range and then followed with a question that will put the conversation back on track of investigating your prospect’s needs, allowing you to gather the information you need to build value in your product before you get into a serious price discussion.

In the third, the consulting example, the full statement might be: “Frankly, Jack, at this point I really don’t know because I don’t know what needs to be done, if anything, but I can tell you that the investment can range from just a few thousand dollars on up.  But it depends on the scope of the work to be done and we’ve still to determine that.  What do you think has been the cost of the shipping department’s logjam that has extended shipping time by almost two days?”

Price questions need not create problems for you or for your prospect.  Price is a natural concern for the prospect, but knowing a price without understanding the real value of the product or service is meaningless.  Your job is to answer your prospect’s question honestly and return the conversation to a point where you can build value for your prospect, so they can appreciate the price in context of value.

If you refuse to answer the price question you run the risk of insulting or angering your prospect–not to mention the damage you do to your credibility and trustworthiness.  But if you begin a serious discussion of price before you’ve had the opportunity to build value, you ask your prospect to make an investment without having a basis to determine whether the investment is justified.

 

I invite you to connect with me:

Twitter:  @paul_mccord
Facebook: http://www.facebook.com/McCordTraining
LinkedIn: http://www.linkedin.com/profile/view?id=6953584&trk=tab_pro

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4 Comments »

  1. Years ago my father who was a professional salesperson his entire life said Price was the fourth real objection with You, your firm and your solution coming first, second and third.

    Price becomes the fallback because not enough time has been invested on the first three. Given the majority of sales take place after the third contact, price should not be brought up to far later in the relationship. IMHO.

    Comment by thecoachlee — April 8, 2013 @ 11:00 am | Reply

    • Leanne,

      I certainly agree that we should not be bringing up price until the appropriate time, but we don’t control our prospects and they will often broach the subject long before we’re ready. When they do we have a couple of choices we can make–the normal old school salesperson thing of trying to duck and dodge the question–or deal with it directly and honestly. It’s how we deal with the unwanted and uncomfortable that really helps distinguish the professional from the huckster.

      Comment by Paul McCord — April 8, 2013 @ 12:13 pm | Reply

  2. Reblogged this on Coley and commented:
    Paul McCord has an excellent perspective of the inevitable challenge faced by all sellers when they get to the price question.

    Comment by David — April 10, 2013 @ 6:56 am | Reply

  3. […] “So, how much will it cost?”“What would something like this run me?”“We have a very limited budget. I don’t want to waste my time. What’s your fee?”“Sounds to me like you’re talking about a lot o…  […]

    Pingback by Handling the Price Question and Building Trust-... — April 11, 2013 @ 8:27 am | Reply


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