Why Your Lowest Price Becomes a Barrier to Closing Business

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It’s not really the price as much as it’s the context of that price. Let’s take mobile apps for example.

$ 9.99 on its own seems very inexpensive but with apps available for $ 3.99, $ 1.99, $ .99 and even free, it’s expensive – by comparison. Look at the moon – we think it’s fairly large but when you look at it in comparison to the Earth and Mercury’s moon it’s a blip in the sky!

Let’s look at a more complex service with a much higher price tag. If the salesperson says that their solution is only $5,000 per person the prospect immediately views this as an expense – and a costly one at that. How can they justify spending, on average, $5,000 per person? However, if the salesperson says, “We can help you recover $3 million in lost revenue and solve your customer retention problem for around $50,000 over the next 8-12 months”, it sounds like a bargain – a no-brainer. The reality is that the $50,000 solution could even be more costly than the $5,000 per person solution but the context is different, the perceived value is different and the expected result is different.

It’s not about hiding prices or building value, it’s about putting fees in the context of what those fees will buy. Compare the two examples above and you’ll see both the answer and the obstacle. The answer is the context. The obstacle is that your salespeople may not be learning what the compelling reason is for their prospects to spend the money. Without the compelling reason, it’s impossible to replace the red-bolded words above, with the words your salespeople need to use.

Another potential obstacle, but hidden this time, is that some of your salespeople are uncomfortable having financial discussions with their prospects. Those salespeople won’t be able to get to the quantification of the problem. And what about the salespeople who need to be liked? They can’t ask the tough questions and become emotional if they go out on a limb and ask. These are three of the many hidden weaknesses we often find when we evaluate sales forces.

You can teach and coach on most strategies and tactics but when your salespeople aren’t able to execute one that was properly introduced and demonstrated through role-play, you can be sure that there is a hidden weakness to blame.

Republished with author's permission from original post.

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