I was working with a sales team recently. We were talking about “THE PRICING DISCUSSION.” They were struggling with how to better handle the price objections.
I hear this concern from every sales person I talk to, but why not, it makes sense. It’s the customer’s job to get the best deal they possibly can get. PRICE is always an issue.
The problem is, you don’t win the PRICE discussion by talking about PRICE! There only two ways to go to in that discussion. Either you can stand firm with your PRICE, or you can DISCOUNT! It’s a simple discussion with no other options. Yet this is how the majority of sales people handle it. The discussion starts with PRICE, focuses on PRICE, and ends on PRICE—usually a lower one.
If we know this, why do we keep having the same discussion over and over—we know the outcome.
We need to change the discussion from PRICE to COST. COST is a completely different discussion, we have much more flexibility in talking to the customer about COST.
First, PRICE and COST are different! While the customer may ask, “How much does your product COST?” What they are really asking is “What’s the PRICE?”
See COST is a much richer discussion. COST is not about our product’s price. COST is about Total Systems –not just your product. COST is about Total Cost of Ownership. Cost is about Total Lifetime Costs. You can talk about COST Reduction, COST Elimination, Cost Avoidance. COST allows you to look at the Opportunity Costs, the COSTS of not changing, and I can go on.
COSTS quickly get you into discussions of RISK and there are whole varieties of discussions there. Likewise, discussions about COST lead directly to discussions about PROFITS and PROFITABILITY.COSTS are another way of positioning discussions around value. We want to have discussions about value, not PRICE.
PRICE is a deadly discussion. We may try to justify our PRICE based on value, but it’s the wrong discussion, it’s too restrictive. It doesn’t focus on what the customer gets, just what they are paying us.
In the purest sense, the PRICE discussion is focuses everything on us. It moves the focus from the customer and restricts the conversation to just our product or offering. The discussion of COST keeps the discussion focused on the customer. It keeps the discussion about them and what they want to achieve, the value they will get and the consequences of doing nothing.
Focus your customer on COSTS, if you’ve done your homework, you and the customer are likely to discover your PRICE is not the compelling issue.