Determining the appropriate time to discuss price is a common challenge for many sales reps. It is quite common in many sales environments for customers to have a desire to get to the subject of price as quickly as possible. How do you handle this challenge? Janek's research indicates that the most common response from sales professionals to the question of price is…you guessed it…they disclose the price. Proper selling skills and sales rep training can help sales professionals to handle this challenge effectively.
First, it is important to understand why exactly disclosing price too early in the sales process is a problem. The simple fact is that if you disclose the price too early in the sales process, then you run the risk of the customer making a snap decision solely based on price before they have an opportunity to also determine the value of the product or service that you provide. When this happens, it commodities your offering. Naturally, if you are not the low price leader, this can create a significant problem.
A faulty sales approach is typically at the root of a premature price discussion. In reality, most clients are reasonable and are looking to obtain the best possible deal. Unfortunately, they may not understand that the best deal may not equate to the lowest price. Even so, customers may often bring up the subject of price in the following circumstances:
- The value of your product/service offers is not clearly understood by the client. Value is only made clear when the customer becomes convinced that the solution you offer is able to meet their needs or resolve their problems. The challenge is that many new sales reps often fail to identify these parameters. As a result, value is not understood by clients and they bring up the subject of price.
- Sales reps follow a sale pitch approach that is product/service centric. In many cases, sales reps follow a sales approach that is upside down. This means that they begin prescribing their products or services before they actually diagnose the customer's problem. Once you offer a solution that is based on the client's problems, as they have expressed, price becomes less of a concern.
- Customers have concealed objectives beyond price. They may not have expressed those objections yet, or the sales rep may not have probed those objections. In many cases, when a client raises the subject of price, they are actually seeking an excuse to defer the sales process. If a sales rep does not understand this, there is a common tendency to place blame on the customer for sensitivity to pricing.
The sales rep does not adequately alleviate the client's risks. Risks are involved in all types of sales and clients may experience reluctance to move ahead with the sales process unless those risks can be first identified and then eliminated. Lack of comfort with the new solution and a fear of change are two of the most common risks that sales reps need to learn to handle as part of sales rep training.
Implementing Effective Sales Training
As a best practice, prior to discussing price, it is important to ensure that you meet two specific criteria. First, determine whether you know the customer's full range of needs. Second, determine whether the customer understands how your offering will meet their needs?
If you are able to meet these two critical criteria, then it is time to go ahead and discuss price. If not, then it is important to tactfully stall matters related to price discussion until you are able to meet these criteria. When you find that clients are prematurely raising the subject of price, consider adopting one of the following responses:
- "I will be happy to provide you with an idea regarding price, but in order to provide you with an exact price quote, I will need to get some more information from you."
- "I will admit that our company is not the cheapest in the market, but you are not looking for the cheapest solution, are you?"
- "For similar solutions, we are able to provide services/products in a range beginning at $XXX, but I cannot be precise until we are able to determine the precise nature of your company's requirements."
Once you have been able to successfully divert the client's attention from price, you can then return to identifying the client's problems and qualifying them for the purchase. Efficient sales planning is crucial to the outcome of any sales pitch.