You know this prospect is a hot one. You’ve established the need, presented your value proposition, and she wants your product or service.
And then BOOM, she’s gone like a cat up a tree.
What happened? Sticker shock.
Like coaxing a cat, overcoming sticker shock requires finesse. You’re going to have to be convincing so your prospect comes back to the table. Remember, a cat doesn’t come down until it wants to.
What to do? At the first sign of distress, ask why. You’ll probably hear one of three reasons:
1) Value. Your prospect may not agree with you on the value you provide.
2) Competition. If she’s shopping your competitors, you have to convince her of the incremental value you provide.
3) Cash. If she doesn’t have a budget line item for your product/service or has used it all up, you have extra work to do. Small companies have a particularly difficult time — there are fewer accounts to move around or money may literally come from the owner’s pocket.
Understand & acknowledge these concerns – it’s a normal step in the sales process. You need to help your prospect see the value, to taste it. But if you’re not getting anywhere, what can you do next?
1) The takeaway. If she absolutely must keep the price under a certain ceiling, what’s in your proposal that she can live without? Restructure the deal accordingly.
2) Pull out the calculator. Cash upfront may be painful — can she afford to lease or set up a fair payment plan?
I was once selling a $30,000 server to a small business CEO. He recoiled when he heard the price — as much as he needed the hardware, he said “I’ve never spent that much for anything in my business.” Well, of course he does, but his landlord doesn’t ask for two years’ rent upfront and his employees are all paid every two weeks. He laughed when I brought up this fact and we worked out a lease deal that was more attractive for both of us.
3) Stay true to your value proposition. If you’re in business to be the low-cost provider, then you need to be the low-cost provider — discounts and deals are your life. But if your value proposition is product leadership or customer intimacy, you need to focus on that value and stand behind it.
Of course it’s wise to prevent the shock in the first place. Get price out on the table early — you’ll weed out the companies who truly just can’t afford it. I like to compare the price of my product to another purchase they’re likely to have made, then ask how they came to the decision to make that purchase. That information helps me involve the right people and make sure we’re on the same page as we move through the sales process.
But remember: Listen to the market. If every cat on the block is in the trees, you probably have a bigger issue. Your company may need to look at your competitive positioning strategy, your brand, your messages, even the sales skills of your team … and your price. Market feedback is powerful. Listen carefully or the cats will never come home.
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