The Price Trap

Price is a huge issue for everyone - sellers and buyers alike. Today, The Whetstone Group shares how you can avoid the price trap.

Problem: One of the most frequent complaints we hear from business owners, sales managers and salespeople alike is the following: "Price is the primary focus of the sale these days -- all of our prospects want the lowest price." It starts out innocently enough. Buyers lead with questions and comments like these: "How much is it? Can you give me a quote?" As the sales discussion proceeds it gets more intense: "That seems like a lot." or "Why is it so expensive?" or "I saw it for less somewhere else." Salespeople often respond by cutting price thus giving away margins and commissions.

Diagnosis: People who sell hear about price so often that they expect the conversation to dwell on price and they tend to overreact to price concerns. Sixty-eight percent of salespeople from a wide range of industries thought that price was the main concern of the customer based on a recent survey conducted by The Sales Board. Yet when customers were asked what was most important to them in a purchase their response was much different. The majority of people were more concerned with quality, service, and relationship than price.

Prescription: To get out of the price trap, you have to stop focusing on it. The only time price is the main issue is when there are no other factors that are important which is rarely (maybe never) the case. The next step is to differentiate yourself and your product so that the prospect does not focus on price. That means not giving feature and benefit presentations -- which cause you to look like every other salesperson.

Instead, change your approach in a couple of ways to focus on the prospect and her challenges and not on your product. First, suggest to your prospect that it’s important to establish an environment where you can explore the details about the prospect's situation. Mention to the prospect that your "biggest concern" is that her focus will be on price and that addressing the real issues (pain) will take a back seat to price. By addressing the price issue early on, you’ll find out where price fits into the decision-making criteria. Experience shows that it will become secondary if you are successful in refocusing the discussion to the prospect’s pain. Next, lead an interactive discussion to understand the emotional reasons behind the prospect's situation and uncover the pains that need to be addressed. By doing this you and the prospect will mutually discover if there is value in your product and remove the emphasis on price.

Whetstone Group is a sales process improvement company that focuses on helping companies implement a proven sales process that will increase sales, shorten the selling cycle, increase closing rates, and improve margins. Learn more at www.whetstonegroup.com