It’s an age-old debate and that’s sickening to be honest. The price will always be too high for people who’re shopping for a better deal. But the ones who’re looking for great value will buy regardless of the price tag.
If you’re faced with this basic price objection, you have three options:
- Reeducate them on the value of your product or service. Perhaps, they weren’t listening the first time you dove into features and benefits (F&B). This time don’t stay from the F&B and focus on their emotional need and desire to buy a product or service such as yours. This intelligence gathering will help you understand your prospect much better than a standards F&B presentation. Something most sales professionals miss.
- In addition to the above, offer them a risk-reversal offer such as a 90-day iron-clad guarantee or even better do it for free and charge a hefty cut on the results for a period of time (6 to 18 months is just fine).
- Refer them to your competitor or ask them to look elsewhere.
As you can tell (perhaps you’ve read this elsewhere on this blog), #2 is my favourite (risk reversal) strategy. It helps the prospect see things in perspective while gaining confidence in you and your abilities to deliver. They also realise that they’ll be paying you a lot more overtime compared to the price you’re asking upfront. Here’s an example:
Price for your consulting engagement: $5,999 with a 90-day money back guarantee if results don’t meet the expectations set (and as per the scope of work).
Alternatively, you can try the no-cost up front option but a 30-50% of the price per customer acquisition over 6 to 18 months. So, if $500 is the price per customer they will share $150 to $250 with you. Let’s do some math here:
- Let’s say the prospect acquires a minimum of 50 customers in 6 months at $500 or $25,000.
- They will end up sharing $7,500 or $12,500 with you!
And you can make it even more painful with a 1 year engagement by doubling the numbers. It looks like this:
- 100 customers in 12 months at $500 or $50,000
- They will end up sharing $15,000 to $25,000 with you!
Ouch! Make this part of your presentation and believe me, they would want to pay you upfront. Why? Who the hell wants to pay double or triple the price for the same results? The primary reason prospects think the price is too high is because they fail to see the value and/or the return on investment.
Of course, your mileage may vary. You might have double the number of customers or perhaps some other parameters for measuring success. The principle remains the same — focus on results instead of features and benefits. The modern-day prospect/customer is already aware of them. It’s on yours and your competitor’s website anyway!
Educate your prospects on why your price is too high by sharing an insight from their own industry or perhaps their own future. That’s the most effective way to make them resonate with your offer and the value you bring to the table.
Check out this video for more insights (I absolutely loved it!):