Are you under constant pressure to compete on price to beat out inferior competitors? Are you frequently asked to drop your price because buyers either don’t care, or fail to appreciate, the value of your premium offering? Do you find yourself responding by fire-hosing the client with a stream of benefits hoping to validate your worth? Join a large club of equally frustrated sales professionals.
What’s the resolution to this pricing conundrum?
First let’s accept the fact that no human being, or company, wants to pay more for anything than necessary. Buyers have come to expect price flexibility and a willingness to negotiate as integral to the buying process. Why? Because buyers have a smorgasbord of “similar” options available to them. And when sellers are asked “to sharpen the pencil” we invariably do. Creating the precedent, “Never accept the first quote.”
Yet under the right circumstances people, and organizations, will pay a premium. Know that your ability to win business at higher rates starts early in the sales cycle long before the formal negotiation process begins. Here are five insights to help you position you to win at your price with no apology.
- Money, time and attention flow to priorities. Higher pricing has less to do with how great your service is and more to do with the perceived importance of this specific initiative by the client organization. Early in the discovery process get clear on the strategic importance of this purchase and obtain the customer’s perspective on the tangible impact and consequences of making the right or wrong decision.
- Make the connection. Use the buyer’s words, not yours, to position your offering as the “must have solution” so that pricing becomes a secondary issue. When outlining your recommendation remind this customer of the business drivers and associated priorities he articulated. Then connect the dots. Demonstrate specifically how the painstakingly-chosen components of your recommendation will nail each of his specific priorities.
- Address the real concern. When asked to sharpen your pencil, do not jump to conclusions. Be empathetic by reminding your customer that you understand the importance of making the right decision. Before reaching for that pencil sharpener address the core issue. “I wish I had more money in my budget” (translation: “I’d like to work with you but I need help finding the moolah”) requires a very different response to, “I don’t see the value in your proposal” (translation: “you did a lousy job of positioning your recommendation in context of my priorities.”) Both may be rectified without dropping your price.
- Avoid devaluing you and your service. If it makes sense to reduce your price remove something from the offering or obtain something of high value from the client. Engage the customer in the process. Reiterate how the specific elements of your recommendation address the critical interests she articulated and ask for input on where to make cuts without diluting the impact on her objectives. 90% of the time when I go through this process the buyer comes to the conclusion that she’s better served leaving everything as is … including the price.
- Be prepared to walk away graciously. There are times when the client simply wants a lower price. If you’ve taken the previous steps and this is the case, you have two choices. Drop your price and recognize that you may have set a recurring expectation with this individual. Or recognize, in this instance, you may not be the right fit provider. On the few occasions I have chosen the high road I have done so with the respect of the buyer, a commitment to keep the door open, and a stack of information that allows me to stay connected in ways that contribute relevant value and position me well for the future.
A footnote to the above: If and when you enter into a price negotiation know who is on the other side of the table. Purchasing and procurement specialists, for example, are highly trained negotiators with a mandate to eliminate any unnecessary expense from their organization. Make sure you bring your most experienced negotiator to these conversations.
Need help with this and other tricky sales issues? Contact salesSHIFT to enquire about our “Blind Spots, Black Holes and Tough Sales Conversations” sales lab.
Now go out and get paid what you’re worth. Good selling!
