Paul reveals some reasons why price may come up early in the selling process.
“Never talk price until you’ve demonstrated some value.”
If you share your price for budgetary purposes, aim high, not low.
Remember, if they’re asking about price, they’re interested!
Is the customer setting their budget or playing a pricing game with you?
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Should I talk price before presenting my solution?
(Transcribed from podcast)
Well, on today’s episode, we’re going to answer a question that came up from a recent training seminar. I was talking to a group of salespeople, and the question was, “You know, what if the customer asks about price before we have even presented our solution?” So that’s what we’re going to focus on today’s show is, should you talk price before you present your actual solution? Well, the answer is… it depends. We’ll get to that very soon.
But before we do that, a quick shout-out to our sponsor, Andrea and her team at The Creative Impostor Studios. The Creative Impostor Studios—they’re here to help you. If you want to launch your podcast, if you have an existing podcast already, they can help with editing, producing, you name it. They’re going to be your go-to resource. So, we’re going to have a link over to their website on this episode’s webpage.
Also, I’m not sure if you’ve noticed on LinkedIn or Twitter or Facebook, if you follow me on any of those outlets, we are well into the 30-Day Tough-Timer Challenge. In fact, by the time this episode launches, I’ll probably be on day 22, 23 of the Tough-Timer Challenge. So that Tough-Timer Challenge is your guide to building mental resilience. And if you want more information on the 30-Day Tough-Timer Challenge and what it entails, it’s very simple. I would encourage you to go visit our brand new website, ToughTimer.com, and that’s T O U G H timer.com. We’re going to have a link over to that website on this episode’s webpage.
Let’s get back to that question: Should I talk price before presenting my solution? As I mentioned in the opening, it really depends. So, let’s talk about a couple of rules to think about before you make your decision. Number one: never talk price until you’ve demonstrated some value. Any time you are going in there and you start presenting your price and you haven’t even created value yet, your price is going to be too high. Because price is only an issue in the absence of value, and if you have yet to present the total value of your solution, of course, price is going to be a concern. It’s going to be an issue. So, never talk price until you’ve at least demonstrated some value.
Now, another rule to consider, if you do share your price with your customer, at this point, you’re probably giving them a preliminary price, maybe a ballpark-type figure. It’s important to aim high, not low. I know that some salespeople would rather aim low, that way they can have a better chance of continuing the conversation, or they don’t want to be ruled out, or they don’t want to be outside of their budget. I get all that. But think about how much harder it is to raise your price once you’ve already led with a lower price. Not only that, but that’s going to encourage the buyer to object on price if you have to go back with a higher one later. So, aim high from the very beginning. And as you give them that price, that ballpark figure, gauge their reaction. How are they responding? What are their non-verbals? Get a sense of whether that’s in line with what they thought. Just gauge their overall response.
And finally, a third rule before we get into how to handle it. Remember that if they are asking about the price, it means they are interested, which is great. That’s good news. You as the salesperson, so much of our time is spent trying to gain a buyer’s interest, trying to meet with them, trying to sell them on our solution. When they ask you about price, it means that they are interested. So that’s a good thing. Something to remember; not really a rule, I guess, but just something to think about when you are meeting with your customers.
All right. So here here’s what I would do. Back to that question: Should I talk price before presenting? And as I mentioned, it really depends. So, to make your decision, just ask yourself, “Okay. Why are they asking about price?” First of all, could it be to establish a budget? (Which is really ideal if you think about it.) If they’re asking about your price so that they can set their budget, it means that you have a lot of control here. You are in a great advantage, because now you are telling them, “Hey, here’s what our solution is going to cost. This is what you should set aside in your budget.” When customers have a budget in place, it’s as if the money is already spent. They’re already conceptually buying into your solution. So, if they’re asking about price just so they can establish a budget, that puts you in a very good position. Okay?
Another reason they might be asking about price is they want to see if you’re within a budget that they’ve already created. And so, ask yourself, “Okay, why are they asking about price? Are they trying to see if they can afford us? Are they trying to figure out if they can afford this type of solution?” This, still, is not a bad spot to be, right? Because you also want to know if you’re going to be able to partner with them. And if they do have a budget that is already in place, the reason they’re probably asking is they just want to see if they can actually fit you within the budgets that they have set in place already.
Another reason why the customer’s asking about price early on in the conversation, they may be getting ready to play a pricing game with you. They’re getting ready to give you objections. This is where they begin the negotiation process. Be aware of that as well. If the customer that you’re interacting with, if they have a track record of playing games and you sense that they’re going to object to your price, they could just be asking about it to get that process started. So be aware of that as well.
So, you have to decide whether you’re going to give that price before you’ve presented your total value. And if the buyer is looking for budgetary numbers, then I would encourage you to share price with them. And also make sure that you’re aiming high rather than low. If you get a sense they’re asking about price just so they can start giving you objections, then I would tread lightly. I would almost delay the pricing conversation at that point and say, “Look. Until I get a full understanding of your needs, I’m not sure what the price is going to be, because it could change depending on the package you choose or the solution that you have.” So, you can push the pricing conversation back. Keep that piece in mind.
So, guys, again, this is an interesting question. There are several different ways you can go. But again, just remember a couple of rules, a couple of thoughts: never talk price until you’ve demonstrated value. Number two: if you share your price, aim high, not low. Meaning, if you’re sharing budgetary numbers, aim high, not low. And also, keep in mind, when they talk price, it means they are interested.
Make it a big day.