Talking about price with a new business prospect can be tricky. If you do it too soon, you might scare away a prospect. If you wait too long, the sticker shock might blow your proposal out of the water because it exceeds reality.
Here’s a list of recommendations and things to consider about the topic of price along with three effective ways to prompt the conversation (including some easy to use ROI formulas).
Recommendation #1: Don’t Surprise Them with Price
- It’s risky to save the conversation about price until the day you present your proposal.
- Objections raised after you have submitted the proposal can ruin your chances of reaching a successful agreement.
Recommendation #2: Align Expectations and Remove Surprises
- Talking about price along the way is a great way to align expectations and anticipate objections by removing the surprise of “What’s this going to cost?”
- When it comes time to present your solution, prospects whose expectations are not aligned with yours tend to stall and delay making a decision. Taking the time to align expectations early, can accelerate the sales process.
Recommendation #3: Determine the Proper Time
- You don’t want to discuss price too soon or too late. Wait until you are starting to gain credibility and the prospect has started to invest some time with you and is leaning in.
- As a general rule, you want to talk about price at just this moment:
- The Assignment is clearly defined and agreed upon.
- There is significant interest in the solution being discussed.
This first criterion emphasizes the importance of agreement upon a clearly defined assignment. Beyond the assignment is the solution. You want to get all the key players leaning in and wanting to know more about your solution, because if they’re folding their arms asking for proof, you’re not ready to talk about price.
3 Ways to Engage with the Prospect about Price
There are a number of ways to prompt the conversation about price. Three that we’ve found effective are:
1. Quantify Desired Business Results
- Once you’ve identified the desired business results (AKA problem, challenge, or opportunity) in pretty specific terms (not something vague like 'increase awareness'), you’ll want to quantify the desired results. Quantifying results can move easily to a return-on-investment (ROI) conversation, which can lead naturally to talking about price.
- Three useful ROI formulas that lead to total return on their investment:
2. Use the Assignment to Discuss the Price
After you have nailed down the assignment, take this conversation for a test drive the next time you are ready to chat about price:
- “Are you going to allocate 100% of your budget to solve this problem or achieve this goal?”
- If the prospect says no, you would follow up by asking what percent they will allocate. In this example, the prospect replies 75%.
- You could then reply, “Great. Are you willing to look at a proposal from me for that 75%? I’m not asking if you’re ready to say yes to that proposal yet, just if you are willing to consider it.”
- If the prospect says yes, you can then ask what that dollar amount is, so that you can build that out for them.
- If you use this route, you will still need to have the return-on-investment conversation at some point. You’ll need to decide if that is now or during your next conversation.
3. Offer an Investment Range
- This works well if the advertiser asks you what it’s going to cost and it’s still early in the sales process.
- You don’t want to just throw out a number you think the prospect wants to hear. Keep your figures in a range that is “sufficient” to reasonably address their business goals.
- For example, “We work with hundreds of advertisers, and we have a vast array of tools to help them achieve their objectives. Our approach is to understand your desired business results and then use our expertise in motivating customers to respond to a message. The result is to bring you the right customers to grow your business.”
- “Now every client situation is unique. Other clients I work with, who are seeing strong results, typically invest between X and Y a week. Some invest that every week, and some just during selected weeks. Let’s discuss the type of ROI you’ll need to make that type of investment work for you.”
Finis Origine Pendet—The End Depends on the Beginning
It is always a good idea to think about and create a plan related to this extremely sensitive topic. Be sure to keep in mind the importance of selecting new business prospects—target accounts—that have the dollar potential to spend like your best customers. At the end of the day, conversations about price are fruitless if the prospect is cash poor and usually more enjoyable with prospects that have plenty of cash!
