How to Handle the Price Question Early in the Sales Cycle
The price of your goods and services is always a primary concern to your prospects. Whether you like it or not, price is top of mind with the majority, if not all, of your prospects; and you probably find the question of price comes up in your conversations with prospects long before you have had the opportunity to build value in your product and service.
The price question presents you with a serious dilemma—how do you honestly answer the question of price, yet at the same time save a detailed conversation about price until you have had the opportunity to build the value in your product and service that justifies its price?
The early introduction of the price question seems to put you in a position of having to choose between two rules of selling that appear to be antithetical to one another at this point—always answer your prospect’s questions honestly and directly, and never discuss price until you’ve built value in your product or service.
Fortunately, you can honor both rules.
The key to addressing the price question is understanding why the question is asked in the first place. Many salespeople see the price question as an objection—it isn’t. It’s an honest question by the prospect who is trying to determine their interest level in your product or service. Just as you are trying to qualify your prospect, they’re trying to qualify your product or service, as well as qualifying you, and one of the major qualification questions they have is price. They’re simply asking the question too early, before they have sufficient information to determine whether your product or service justifies the investment.
The easiest way to handle the question is to give the prospect a direct answer and then bridge back to your investigation of their wants and needs to build value. Depending upon the product or service you’re selling, your answer to price may be specific—“This truck is twenty five six fifty four”—or general—“depending upon your specific needs we find when we do the needs analysis, the complete instillation of the software and training can range from a few thousand dollars on up.”
Your statement then needs to be immediately followed up with a question to bridge back to investigating their needs to help you build value.
In the truck example above you might then ask, “Will you be pulling a trailer often, or just on occasion?” In this example your full statement would be, “This truck is twenty five six fifty four. By the way, will you be pulling a trailer often or just on occasion?” You’ve answered your prospect’s question, but you then lead them back into a discussion of their needs, which will help you determine what vehicle will best meet their needs, give you information to highlight the features of the truck that will meet those needs, and the benefits of those features that will give value to the price of the truck.
In the software example, the full statement might be something like: “Well, Nancy, depending upon your specific needs we find when we do the needs analysis, the complete instillation and training of the software can be anywhere from a few thousand dollars on up; by the way, what other applications do you run that our software will have to be integrated with?”
Again, you’ve given an honest answer to the price question since at this point you don’t know what the package will cost. Instead of trying to answer an impossible question, you’ve given the typical cost range and then followed with a question that will put the conversation back on track of investigating your prospect’s needs, allowing you to gather the information you need to build value in your product before you get into a serious price discussion.
Price questions need not create problems for you or for your prospect. Price is a natural concern for the prospect, but knowing a price without understanding the real value of the product or service is meaningless. Your job is to answer your prospect’s question and return the conversation to a point where you can build value for your prospect, so they can appreciate the price in context of value.
If you refuse to answer the price question you run the risk of insulting or angering your prospect—not to mention the damage you do to your credibility and trustworthiness. But if you begin a serious discussion of price before you’ve had the opportunity to build value, you ask your prospect to make an investment without having a basis to determine whether the investment is justified.
By addressing your prospect’s question briefly but honestly, and then moving the conversation back to investigating your client’s needs and wants, you can successfully delay a detailed conversation about price until you’ve had the opportunity to demonstrate why your product or service justifies its price.