Prospects can sense when salespeople are uneasy and become defensive when discussing price, and they try to take advantage of the situation. So successful salespeople avoid discussing price by focusing on value instead.
Expensive and higher-priced are not the same
Expensive and higher-priced don’t necessarily mean the same thing to the prospect. Expensive means the product or service isn’t worth the price the prospect is paying for it.
Higher-priced can be overcome by the value the product or service brings to the prospect.
If your product or service is priced higher than that of the competition, your job is to help the prospect see that it’s not more expensive.
It’s the prospect’s perception of value that determines whether something is priced correctly or not. You can overcome a price difference by showing that the value-added benefits you’re offering make the purchase cost-effective.
Take the initiative
When it’s time to discuss price, it’s a good idea to take the initiative. When salespeople proactively sell value, they usually avoid price objections.
But before salespeople can speak with authority on value, they must be knowledgeable, recognizing their strategic advantages and weaknesses.
Salespeople can start by talking about a prospect’s budget or pricing terms. Doing it confidently without awkward body language or shifting eye contact eye contact can establish the right tone for value-added selling.
After stating the price to prospects, it’s a good idea to stop talking and give them the floor. Too much talking at this point may lead to price backpedaling.
Resist the urge to say any more until the prospect reacts. Listening to the buyer here is crucial to handling objections.
Call preparation
Value-added selling starts with call preparation. By giving advance thought to what you want to achieve on your sales call, you’re more likely to focus on value, not price.
Here are five objectives when planning your call:
- Define the market. This is the first thing you should try to do to prepare yourself to sell value, not price. It helps identify potential customers or windows of opportunities for growth with existing customers. It enables you to think and plan value-added strategies. Answering questions like “What facts do my current customers seem to have in common?” will help you develop value-added strategies for your prospects.
- Gather information about your best prospects. Try to collect data on a variety of topics: the marketplace, your competition and your prospects’ competition.
- Prepare to give information. Become the single greatest information resource for your prospects. Provide information regarding their customers and what you can do to help them increase their business and profits. Educating your customers builds loyalty that can’t be bought for a cheaper price.
- Prepare to assure satisfaction. Because of your commitment as a value-oriented salesperson, you have an obligation to follow up with your customers. When your customers see your commitment to service, they usually won’t fall prey to the price cutters.
- Know how to explain your complaint resolution system. Prospects like to hear that you’re prepared to listen non-judgmentally and fix problems instead of fixing blame. Prepare to demonstrate the value-added qualities of your product or service.
Analyze your customers
Study your top customers. Look not just at your product or service strengths, but the entire context of your relationship with each customer.
Ask yourself why they buy your product. Maybe it’s your quality, technical support, follow-through, customer service, delivery or a host of other variables.
Define the contribution that you make to their business that allows them to differentiate you from the competition. The contribution should be something that puts you in a special category — that makes you stand out from the alternative options.
Handling unreasonable demands
Occasionally, a prospect will make a demand that can’t be overcome, even with all of your value-added benefits. The key here is to recognize the difference between objections and demands.
If a prospect still complains about price, this is an objection and you should continue to stress your valued-added benefits until you overcome it. If a buyer says, “I won’t buy at that price,” this is a demand and you might want to begin negotiating or withdraw.
Successful value-added selling may require that both parties be willing and capable of making changes in their positions.
Adapted in part from the book “Crush Price Objections,” by Tom Reilly, a renowned expert on value-added selling.
