Let me create the scene: you’re meeting with your new prospect for the first time, and your goal is to build rapport and begin a needs analysis that will build your credibility as an expert in your field, and as someone who really cares about their business. You want your prospect to believe you’re someone who can truly help them solve their complex business problems. To accomplish this, you intend to metaphorically put yourself behind your client’s desk to uncover key challenges and prime opportunities their business is facing so that you may become their partner and work with them to create customized solutions. You’re completely prepared for the meeting and you know exactly how you’re going to lead the meeting. You sit down, exchange pleasantries and your prospect says… “Let’s just cut to the chase. Tell me… how much is this going to cost?”
If you’re in sales, there is no doubt that you’ve experienced this situation first hand. There is also no doubt that your answer to this question could strengthen and set the foundation of your relationship. Or conversely, greatly compromise your ability to move past this step of the sales process and any possibility of a future relationship. In fact, it could easily be argued that this is a make or break situation!
One of the groups I belong to on LinkedIn is discussing this situation right now. We’re sharing ideas and thoughts on how to best answer “the price question” when it comes up early (too early) in the conversation. This group has over 10,000 sales executives and managers… all chiming in with fantastic thoughts, experiences and ideas on specific ways to effectively answer this question. One of the members of my group responded with the most incredible story I’ve ever heard, and he gave me permission to share it!
Steve E. shared… “Years ago, I was discussing this very topic in one of my workshops. A salesman in the group told the story about how he walked into a prospect's office, shook hands, and started to get out his notebook, pen, and prepared materials. The prospect interrupted him and said, ‘You can put all that away... I just want to know what your price is.’ The salesman nodded, packed up his bag, took out a business card and started writing on it. He then handed the prospect the business card and said, ‘I put the names and phone numbers of three of my biggest competitors on the back of my card—they all sell based on price. I solve problems and sell value. Thank you for your time.’ And he headed for the door. The prospect called him back. ‘You're the first real salesperson I've met in a long time,’ he said laughing. ‘Have a seat.’ “
While there are many different ways to answer this question, if it happens to come up too early, it’s important to realize that you can only truly answer “the price question” when you know how much it’s going to cost. That seems like common sense, and it is. However there are many salespeople out there who are just pushing products… not selling solutions. So this will be an easy question for product pushers to answer early on. However, if you’re solving business problems and creating customized solutions for your clients, then you are truly selling only what they need. In this scenario, it is absolutely impossible to accurately answer “the price question” early on. You must first take the time to dig deep and completely understand what you’re trying to solve and what they need before you can offer (or sell) customized solutions.
Price definitely matters, but it’s not nearly as important as value! And when you’re analyzing price, there are many factors that contribute to the overall cost. There are hard costs, soft costs, fixed costs, variable costs, opportunity costs, etc. All of these costs greatly affect a company’s profit line. Make it your mission to understand how your prospect’s business works and what it needs to become more profitable, and then create buyable solutions that far exceed the cost of NOT doing business with you!
While the story above is my absolute favorite of all time, it’s a pretty gutsy move. Another way to think about how to answer this question is with the concept of “rice and range.” Thinking about rice… you don’t buy rice by the grain, right? A single grain of rice is a waste and certainly won’t offer enough to satisfy. You buy rice by the scoop or pound depending on how much you need. Range is just that. It refers to the idea that you should have some sort of range to share with your prospect… even if it is extremely broad. Following are a few examples of “rice and range” responses to the price question if it comes up too early in the conversation:
- That depends. Honestly the cost is relative to what type of solution you need, how quickly you want to get started, and how quickly you want to see results… however I can tell you that the folks we work with that are getting the best results are typically spending anywhere from blank to blank per month/quarter or year.
- Well, that depends. I’m not trying to avoid the question; I’m just not prepared to answer it right now. Before I can answer that question I need to know a lot more about your specific goals, opportunities and challenges. However, I can tell you the folks we work with that are getting the best results are typically spending anywhere from blank to blank per month/quarter or year.
- Wow, that’s a tough question to answer so early on, but I do understand the importance of cost and how it affects your profit line. The true answer right now is it all depends on your goals, specific objectives and how fast you want to get started. I want to get a stronger understanding of those things, and then we will be in a better place to talk about solutions, different ways to structure the program/relationship and pricing options. However, I can tell you that the folks we work with that are getting the best results are typically spending anywhere from blank to blank per month/quarter or year.
- Believe it or not, I honestly don’t know the answer to that question right now. Like your business, there are so many factors we consider that determine price. And everything we create for our customers is highly customized. So, at this early stage in our relationship it would be extremely short-sighted for me to throw out a price without knowing more about your specific needs, challenges and opportunities. However, I can tell you that the folks we work with that are getting the best results are typically spending anywhere from blank to blank per month/quarter or year.
The price question often comes up too early in the conversation. And perhaps it’s done with good reason… so the buyer can get to know what kind of a salesperson they are dealing with, a product pusher or a problem solver who can really help them with their business. Therefore, it’s important for salespeople to answer the question in a way that will strengthen their relationship and enhance their credibility.
What are some other ways we might answer this question? Do you have any specific stories or experiences to share? We’d love to hear them!
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Demrie Henry is a Performance Consultant at The Center for Sales Strategy.