By John Holland, Chief Content Officer, CustomerCentric Selling®
A common misconception (maybe perpetuated by Procurement) is that price is the primary reason for making buying decisions of non-commodity items. Many salespeople are tentative or defensive when providing prices.
Either verbally or via body language sellers send messages to buyers that quotations aren’t set in concrete.
Price is an important component in making decisions and I wanted to share a few thoughts on when and how to provide pricing.
- Sellers open themselves up to pricing questions when they mention product prematurely. Once product is on the table it’s reasonable for buyers to ask: “How much?” This question often elicits slippery (“your mileage may vary”) stereotypical responses from salespeople. At some level they know providing price isn’t the right thing to do at this point.
❗ TIP: My suggestion in situations where value hasn’t been established is to tell buyers that you can’t give an accurate estimate until you better understand their requirements and ask if pricing discussions can be deferred. Most buyers will give sellers this latitude.
- Others will persist and want pricing now. They’ll become frustrated with sellers that don’t respond. Years ago I would give these buyers a range. The problem in doing that was they would always remember the lower number and try to hold me to it.
❗ TIP: I found a way to prevent that from happening by offering them a “not to exceed” number. If after sharing that number I needed smelling salts to revive a buyer it was likely:
- This company wasn’t a prospect
- I needed to call higher
In my experience the higher a seller calls, the lower the likelihood there will be early questions about pricing.
This may be due to the fact that higher levels aren’t limited by budget. If a new initiative offers more value than planned acquisitions executives have the ability to re-allocate budgets.
? Bonus Tips:
- I also suggest buyers should know the pricing soon after they understand value. Ultimately price is a qualifier and should be provided fairly early in the buying process.
- I also believe an important factor in reducing negotiations is the level of the person sellers ultimately close. If you’re selling technology and ask IT or Procurement for the business, brace yourself for several hard pricing squeezes. In stark contrast if you’re closing a line VP who understands the potential value, protracted negotiating sequences are less likely.
Sellers are usually viewed as people that must push sales cycles forward. Once Key Players understand value they recognize there is a cost of delay and want to move through buying cycles to start reaping benefits.