No one can debate that we live in a price conscious society. I’m constantly amazed at how the price of every product or service I purchase seems to be rising, even when I’m still receiving the identical product or service we used to receive at a lower price. And in some cases, I’m paying even more today for less product than I used to receive at a lower price (the next time you’re in a grocery store, check out the shrinking sizes of cereal boxes!)
Our newspaper advertising clients are experiencing the same thing and feel the same way. For them, price is still the easiest way to compare advertising products. There are also those clients who live by the creed “you don’t get what you don’t ask for” so for them it has become the norm to ask for a better deal or a substantial discount. They’re fishing, with the hope that we’re desperate enough to take the bait.
I’m continually reminding my clients and prospects that advertising is not an expense, it’s an investment. Stop focusing on the cost, instead focus on the opportunity and potential results. Without investing in a smart marketing strategy their business will – either today, tomorrow or five years from now – wither and die.
So, moving on to the topic of this edition of The Sales Cycle – are you having problems overcoming price objections?
In my opinion, it’s all a matter of perception and belief. Every purchase decision we make as consumers involves the risk of making a bad decision. So remember that when a client/prospect says your price is too high, it does not necessarily truly mean your price is too high. And it most definitely does not mean that you should immediately cut rate and offer discounts.
What your client/prospect is really saying is “PROVE to me that buying from you is a good decision.” In fact, I’ll take it one step further – I believe that when a client/prospect mentions price as an objection, it means that you have an interested buyer! However, they are obviously not ready to sign on the dotted line quite yet, and whether or not they do depends on what you do next. Proceed with caution, and keep two things in mind: either your client/prospect simply doesn’t believe in the features, benefits and value of the product you are offering (a “non-believer”) -or- your client/prospect is giving you a buying signal predicated on price (a “negotiator.”)
The question is, can you tell the difference? Personally, I always assume that price objections come from “non-believers.” I proceed to ask additional probing questions to uncover what the true objection is, and then re-establish the value of the product I’m proposing. In order to successfully accomplish this, you need to know your product inside and out, know your competitor’s product inside and out, know your market, and make sure the client/prospect understands that by purchasing the product they also get YOU – a trusted business advisor and newspaper expert!
Other ideas for how to avoid taking about price with a “non-believer” might be:
– Continually use the word investment instead of the word price. Remind them how important it is to invest in their business.
– Talk about results! Admit that the investment to participate in the program might be perceived as being high by a person who hasn’t experienced the results of our program…and then show them successful results. Follow up by asking “Could you see your business benefiting from these kinds of results?”
– Present them with testimonials from current and past clients who are happy with your service and understand the value you deliver.
If you’re dealing with a “negotiator,” then your client/prospect may truthfully be most concerned with not being able to afford your product or service – or believe that your price is not in line with other competing media options. What they might really be saying is that “if your price was lower I would buy it.” So if you feel that you’ve properly established the value of the product and nothing else has worked to close the sale, the best approach might simply be to ask them!
Before you consider rate discounts as a last resort option, try these proven negotiation tactics first:
– Take out a piece of paper and show the numerical value of the program by calculating exactly how the results could outweigh the costs.
– Minimize price objections to the smallest number (ie: If you spend $200.00 more that equates to only $16.00 additional investment per month.)
– Tell them you don’t want to lose a deal over a few dollars. Ask what else you can do to help close the deal together.
– Make it easy for them to buy. Explore ways to get creative with your billing/financing/terms (ie. We can bill you 25% now and the balance in 30 days.)
I honestly don’t believe in price objections. Studies show that the vast majority of all purchases are made for other reasons other than price. Personally, I’m almost always willing to pay a little bit more if I know that I will get the value that I want or will achieve my desired results. In fact, price rarely stops me from buying something if I think it will do what I need or want it to do. Of course, this sometimes leads to interesting conversations with my wife….
So ask yourself, did I effectively present my product or service to my client/prospect? Will my program help my client/prospect solve for all of their business needs? Is it possible that the price objection is a smoke screen because I didn’t sell my client/prospect on the true value of my proposal? Ultimately the bottom line is this: until you can successful define and defend the value of your recommendation, your product or service will always be over priced in the mind of today’s price conscious consumer.
Have a terrific week,
Dan
If there are specific topics you’d like to see discussed in a future issue of The Sales Cycle, please contact me at 612-278-0223 or dan@mna.org