Setting Price Expectations
No one likes sticker shock, not you and certainly not your prospect. The last thing you want when you mention your final price is for the prospect to gasp, clutch his heart and keel over. That’s why it’s wise to prepare your prospect for what’s to come in terms of the financial investment he will be asked to make.
This article is intended for salespeople for whom price is not their prime selling tool – salespeople who sell a quality product or service at a fair but, not necessarily the lowest, price.
It’s simply impossible to have the lowest price and still offer a quality product or service, competent after-sales support, advertising and marketing campaigns, continuing product and skills training, etc.
If your prospect is looking for the lowest price, chances are you won’t get the sale. On the other hand, if the prospect will put value before price, you stand a good chance to add another name to your list of satisfied customers.
What to Expect
Look around the prospect’s facilities. In general, if the condition of the building, the equipment, and the office furniture indicate that the prospect is inclined to purchase quality then he is likely to be the type of person who will consider value before price.
If, on the other hand, the building is in need of repair, the equipment is outdated, and the office furnishings have seen better days, then you’re probably dealing with people who are price sensitive and will put price before value. In this case, I recommend you set price expectations very early in the sale. If you determine that low price is the key deciding factor to making the sale, you may want to move along and not waste your time.
Remember the old axiom:
Lowest price, best service, highest quality – pick any two!
There are two times you can set price expectations with the prospect. One is during your pre-visit qualifying telephone call and the second is during the actual sales call itself.
Sometimes you can set price expectations when you call the prospect to set up an appointment.
Remember, you’re calling to make an appointment with a real prospect and want to avoid making an appointment with a PWOT (Potential Waste of Time). However, this approach can scare off a real prospect so use it with caution and be careful not to unwittingly disqualify your prospect.
Example 1, the Low Price Method:
Salesperson: “Mr. Prospect, I won’t be able to give you a price until I determine what you really need which is why our meeting is so important, but I want you to know that prices normally start at around $AAAA. Are you OK with that?”
Note: Some salespeople are inclined to give an artificially low price in order to get the appointment. While this technique might assure you an appointment, it really hasn’t qualified the prospect or set price expectations properly and you may end up dealing with a PWOT.
Example 2, the Price Range Method:
Salesperson: “Mr. Prospect, I won’t be able to give you a price until I determine what you really need which is why our meeting is so important, but I want you to know that prices normally range between $AAAA and $ZZZZ with $MMMM being about average. Are you OK with that?”
If the prospect balks at the price range, acknowledge his concern and point out that the price could be as low as $AAAA but you can’t really give him a firm price until you meet with him to assess his needs.
Early in the Sale
Even if you have already set price expectations during your telephone call, it’s wise to reinforce it one more time during your sales presentation.
Use the following approach if you know the prospect has received or will be getting more quotes or will be shopping around.
Salesperson: “As I mentioned on the telephone, prices are likely to range from $AAAA to $ZZZZ and I’ll be able to give you a firm price after we determine exactly what you need. I’d also like to mention that, while my price will be competitive, it probably won’t be the lowest. I say that because this is a very competitive business, and everyone knows how to cut corners on quality, after-sales service, and other things like that that you don’t always appreciate until you really need them. We have a reputation for quality and we’re simply not prepared to cut corners.”
Use the following approach if you’re not sure of the competitive situation.
Salesperson: “As I mentioned on the telephone, prices are likely to range from $AAAA to $ZZZZ and I’ll be able to give you a firm price after we determine exactly what you need. Whatever the final price, you’ll find it very competitive, especially when you take into consideration the quality of the product/service, the after-sales service, and the personal attention I give my customers. We have a reputation for quality and we don’t cut corners.”
Scaring the Prospect
It’s not your intention to scare off the prospect by bringing up the price issue too early in the sale. You’re simply trying to manage his price expectations in the hopes of helping him avoid sticker shock. Doing this in a professional manner can often make your prospect more receptive to a value-based approach to solving his problem.
Now it’s your job to present the value of what you’re offering. Remember, if the prospect can’t see the value, any price is too high.