Has this ever happened to you? During an initial discussion with a prospect, you make it a point to review your pricing information. You put everything right out on the table. The prospect tells you the price you mention “looks fine” (or is “OK,” or “seems fair,” or is “in the ballpark,” or any similar piece of vagueness). The prospect then tells you to put together a couple of samples, designs, or prototypes. You agree, and you get to work. You bring your samples, your prototypes, your designs, and everything else to a second meeting. And the prospect sees something exciting in what you’ve done… and gets interested.
Then, just when you think the time has come to seal the deal, the prospect says, “You know, I’m really not that comfortable with the pricing.”
Wait. What happened to “the price looks fine”?
It evaporated, that’s what happened. Why? Because you invested your own time and energy before you confirmed the prospect’s ability to make the investment.
Long before you begin working up designs, assembling samples, or doing anything else that constitutes a significant investment of your time, attention, or other resources, you must discuss exactly what this person wants… and why he or she wants it. Essentially, you must reaffirm the importance, not just of working on the project, but of working with you. Then, with that much established in the emerging relationship, you need to explicitly confirm that the investment this person is prepared to make is indeed within the range you charge. That’s not the same as getting the other person to say, “The price seems fine,” or, “It’s in the ballpark.”
Here is what confirming the investment might sound like:
“I’ll work up two designs from which you can choose, Bill. If you choose one, are you going to be 100% comfortable making a $_____ investment? If not, we should talk about that now. Would you like to start?”
If you are going to have a “discussion” about price, the time to have it is before you begin jumping through hoops for the prospect. Once a prospect says that he or she is 100% comfortable with your price, you have effectively taken the “your price is too high” objection off the table.
Selling professionals have all sorts of interesting notions about what would happen if they attempted to discuss budget, fees, funding, investments, etc., before presenting something that would justify an amount. Rarely are the scenarios that they conjure up positive ones. Yet the outcome is positive. Although the discussion just outlined may not be as familiar or as comfortable (at first) as saying, “Does the price look OK?,” the method just outlined, followed by a confident silence, will save you time and preserve your margin.
It really is essential to bring the pricing issue up in a direct way. Before the purchase is finalized, the prospect who responded with enthusiasm to your offer is inevitably going to pause to consider nagging, unresolved questions like:
“Can you really afford this?”
“Are there better alternatives?”
“Can’t you get a better price?"
As a result of these (unspoken) internal questions, the sale that once seemed “in the bag” may turn into a protracted negotiating session, and you may end up losing margin – or losing the sale altogether.
By raising the relevant pricing issues up front - before you invest lots of time and effort - you can resolve these questions in a collaborative way as the prospect’s peer. You can address all the relevant issues in a way that engages you both, feels safe to the prospect, gets the real issues out on the table, and positions you as an important consultative resource. And, of course, you can also identify people who simply can’t afford to work with you.
You’ll find that with a little practice, it only takes you a few minutes to confirm the investment. Once you make a habit of doing this, you’ll waste less time with unqualified prospects, close bigger deals, and spend little or no time haggling over pricing.
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Reach out to Ken Smith with any questions. Call 301-590-8700, x101, or email email@example.com .