Many salespeople dread talking about prices.
They’re worried about complaints, negotiations, and losing the buyer. In addition to having a solid discounting policy, you’ll want to understand the factors below that lead to pricing discomfort.
As a seller, here are the 7 price discussion mistakes that put you at a disadvantage.
1. Not Establishing Value Up Front
Without establishing value up front, it will be a struggle to defend your prices. It also takes the focus off providing results, which should be your main goal.
You establish value by getting strategic with your customer. Ask the right questions to uncover the business impact of their pain or opportunity for gain, then quantitize it. You offering is valued by what it will save or make your customer, not what it costs.
Proof of concepts, ROI calculators, customer testimonials…these all help, but there is no substitution for a good old fashion question based sales process.
2. You Consider Your Prices as Flexible
As a seller, you realize you have some flexibility in terms of pricing. And because you can, you think the client expects it. This is where you have to learn the correct way to handle discounting, so that you’re comfortable saying no.
Realize that you’re the one in control of the situation. If you’re confident in your value and you think you’re being fair, keep moving forward.
3. Believe that All Price Challenges are Real
Buyers ask for price reductions simply because they can. They’re used to asking for and receiving discounts even if they’d be perfectly happy to purchase your offering without one.
If your product fits the company like a glove and they’re still asking for a discount without ordering a large quantity or paying up front, just say no and the deal will move towards closure.
4. Believe that Their Counterparts Know Competitive Pricing
No two products are identical. And you get what you pay for.
Make sure your potential buyers know that there is a relationship between price and value. You can do a lot by understanding their situation to see if they need the Honda or the Ferrari of software.
Price your product at something you can stand behind and don’t worry so much about the competitors. If you’re charging too much, you’ll figure it out quickly. On the other hand, charging too little can be difficult to gauge, because you’ll still be selling, but you might not be making as much money as you need (or want).
Test the price of your offering and don’t depend on competitors or outsiders. Assuming they know what they’re doing will only lose you money.
5. Fear Discussing Prices
It’s innately awkward. Asking someone to give you money is not normal. But remember that you’re giving them something valuable, and the more work you put in to help them, the more willing they’ll be to pay you.
6. Focus on Defending Prices Rather Than Providing Results
If you’re doing this, you’re wasting your time. Your sales should be results driven, because you’re a facilitator to helping your prospect’s business.
With the mindset of being a helper, not a salesman, you can achieve the best results. You’ll still face challenges, but it’s up to you to combat objections smoothly.
7. Overdesire to Win the Deal
It’s natural to want to close as many deals as possible, after all- that’s your job.
But habitually giving in to clients is not the way to do it. It creates a model that assumes asking prices aren’t warranted and creates prospects that continually complain. Although every sale is unique, don’t be afraid to stick with a price you stand behind.