If I had a nickel for every time I heard some salesperson complain about how they lost a deal because of price, I'd be a very rich man.
Sure, price is an issue when you're selling a product or service -- whether long distance minutes, soybeans or houses. But to blame price when you're selling truly differentiated products or a genuine full-service approach to problem-solving is, I believe, a cop-out.
Think about the last couple of major purchases you made -- say, a home, a boat, a new kitchen, or tutoring for your child? Did you choose the lowest-price option, the cheapestoption available? Ever take your family whitewater rafting? Did you seek out the cheapest outfitter, or were you willing to pay extra perhaps substantially more -- for an outfitter with a stellar reputation for safety? Would you choose the cheapest bungee jumping opportunity or the one that uses the strongest (and therefore more costly to them and to you) bungee cords? The answer seems obvious.
Few people truly want the cheapest of anything, because they know you get what you pay for. And while you may not have chosen the most expensive option in each of these examples, you most likely didn't or wouldn't choose the least expensive in any of the cases. Why not? Because there were other factors to be considered: the hassle if you had to constantly bring the boat in for repair. The endless repairs of a cheaply built or poorly maintained house. The extra expense of getting the kitchen redone if the kitchen contractor did a less-than-professional job. The safety of your family tumbling down that river. Or your own safety at the end of a rubbery cord dangling hundreds of feet below a bridge
What most people -- your prospects included -- really want is not necessarily the best price, but the best value. Value is the amount of benefit you get out of something vs. the total cost (financial and otherwise) you'll pay to get it. If something is inexpensive but is cheaply made, is it really a good value? That's what your prospects are thinking, even as they tellyou they need to get a better price from you. So, don't fall for it.
The dollar price your prospects will pay is just one cost among many they may end up paying throughout their ownership of the product or service they buy. It's just one factoramong many that they will consider before selecting a provider.
My wife and I bought our first house two years ago. Our broker, who was top-notch, introduced us to a couple of really good contractors. While we could have shopped them around, we took it on faith that she would only recommend contractors that were tops in their fields. We suspected that we were going to pay a premium for this, but we were willing to do so because the lower risk of screwing up something as important as landscaping, felling trees, and ensuring pests stayed outside where they belong was something of great value to us. And guess what? We've been 100% satisfied with the results, and don't even remember what it was we paid to get them.
To be sure, now that we've been in the neighborhood for a while and have gotten names of other contractors from our neighbors and friends, we most certainly do seek to get multiple bids on major work. And we may very well end up selecting a contractor who offers the lowest price; but we'll never choose one just because he does. The low price will be an added benefit of the good quality and responsive service -- two factors very important to us -- that we expect we'll get from him.
Your job as a professional salesperson is to uncover what value means to thisprospect: what benefits they're looking for, what the costs are of owning your kind of product or service, and what worries or concerns your prospect has regarding this decision. Then you need to position your offering as the one that is best aligned with these three considerations, making sure your prospect understands that the value they're getting from you exceeds the value they'd be getting from any alternatives -- including the status quo -- even if it's not the lowest price.
Action Item
Identify at least two current deals where you feel you're in a price battle, and one lost deal you feel you lost on price. For the lost deal, re-contact the prospect and have a frank conversation with him. Ask an open-ended, non-leading question: Why'd you choose so-and-so. I'm willing to bet the first thing out of his mouth will be something other than price.
For the deals you're currently working, make a list of all the benefits you know, or suspect, this prospect values. List all the potential costs, including potential expenses they might incur by going with a competitor, but which they would not incur with you.
If you haven't already done so, determine what worries and concerns your prospects have about making the "wrong" decision. Once you've done that, you have what you need to prepare a pretty strong business case that your higher-priced offering is really the best deal -- the best value.
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