Don’t Cut Your Price: 6 Tricks
Here's a sentence no seller wants to hear: "Can I get a better price on that?"
The information explosion, globalization and economic pressures have created an environment in which everyone believes that they can get anything you are selling for a lower price. Buyers have access to many more suppliers and can make a decision with greater confidence–even without a personal or local relationship.
Here are six smart ways to win sales without having to compromise on price.
1. Bring new information.
Often the buyer is using inaccurate information or inaccurately applying information. By bringing new insights and new facts to the conversation, you can move the conversation from “price only” (or worse, “cheaper only”) to real issues.
Recently one of my clients was faced with a “drop your price by 35% or else” ultimatum. By demonstrating the real raw cost numbers for materials, they were able to disarm the “drop or lose” threat.
2. Give buyers a different way to look at information.
Misunderstandings often are rooted in context: A prospect or client may not be considering seasonality, expedited vs. standard shipping, regular vs. remnant pricing, full featured vs. basic specifications. One way to change the conversation is to ask: “Which characteristics of our more fully featured approach would you like to remove in order to receive the deeper discount?”
3. Let the customer control the conversation.
Customers often feel powerful and informed–so if you try to take control of the conversation, you may create a confrontation. By letting a customer have control and talk themselves through the pricing concerns, you can steer a conversation rather than fight it.
As one of my mentors often says, “Don’t be frustrated; be fascinated.” Ask questions and guide rather than argue.
- Read more: 3 Things My Mentors Taught Me
4. Focus on yield, not price.
Many times, the difference between prices is not seen in the inputs, but the outputs. How will your product, service or solution affect the yield of your customer’s process? By keeping the discussion on the buyer’s business issue, you align your prices with their real needs.
5. Understand your own math.
Smart sales people understand the numbers of the buyer’s industry and competitors as well as their own. This allows you to be more versatile in the conversation.
6. Be prepared to walk away.
Easier said than done, I know. However, if you're not really willing to walk away from a bad opportunity, you can waste a great deal of time with bad prospects.
Often, you face a buyer who learned that pounding on suppliers for lower prices demonstrated strength. That buyer missed the rest of the lesson: the value of being effective. In a situation like that, you have to diagnose early and exit fast.
These ideas were at the heart of a conversation I had recently with Mark Hunter, author of High-Profit Selling: Win the Sale Without Compromising. If you would like to hear the interview in its entirety, click here to listen.