Hey, guys, this is Steli Efti with Close.io.
In sales, you never want to talk about price without first establishing the value.
I recently did a cold calling coaching session with somebody and in the middle of the interaction,
he was calling me, it was a first cold call prospecting me, trying to qualify me as a
buyer.
Very early on I stopped him in his flow and I said, “You know what?
Can you just send me more information?”
He said, “Yes.”
Then I told him, “Well, before you hang up, tell me what’s the price of your application
or your product because I don’t want to look at information, even if it’s interesting
to me, if the price is not right, then I don’t have to waste time reaching back out to you.”
He thought about it for a second, thought it was reasonable, and just gave into it and
said, “Yeah, you know, it ranges usually around $10-20,000 per year.”
Big mistake.
He knew nothing about me, he knew nothing about my budget, he didn’t have anything
to base any pricing on, but because he was pressed from my side and what I said seemed
reasonable, he just opened up and gave everything away.
Why is this a bad strategy?
When you talk about price with a prospect before establishing the value that you can
create, before understanding even the value that you are able to create, what you’re
doing is you’re turning price into a pure cost factor, a pure commodity, and at the
end of the day, you’re losing control over the sales interaction.
I asked the guy, “Hey, how did you know what price to quote him?
Do you know if he’s an enterprise client?
A smaller or a mid one?
Do you know how much support and service he needs?
Will he get any consulting?
Do you know what kind of volume of activity he’s going to have on your platform?
Can you really give a reasonable range without knowing anything of the buyer?”
The guy on the other side of the line went, “Well, you know, not really, I just took
a stab in the dark and I just best guessed, I didn’t want to say nothing.”
I told him, “You know what?
What if the price that you said was too high?”
He’s like, “Yeah, I know what you’re going to say, that’s why I was leaning more
toward the lower end of what we would charge.”
Ah ha.
“What if your price was too low?”
Silence.
What if it’s too low?
For some buyers, they’re budget conscious, they want the cheapest thing possible.
For others, they have tons of money and they just want to know that you’re serious.
If you quote them $10-20,000 a year for something that they usually would spend $2 million a
year, they’ll think you’re not a suitable fit, you’re not the type of vendor they
typically deal with.
You lost the deal because you gave away a price that’s too cheap.
I know for some people this is hard to believe, but when you don’t know who you’re dealing
with, you’re throwing darts in the dark, your chances are higher when you go to Vegas
and put everything on red.
You don’t want to turn a sales call into a gambling interaction.
You want to know what you’re doing, you want to be in control of the interaction.
What should he have done instead?
Instead of just giving away a price, blurbing out some number, how about asking me what
my budget is or what my expectations are?
Since I told him, “Hey, don’t just send me information because if I find it interesting
and the price is not right, then I’m just going to be wasting time reaching back out
to you, so tell me, what’s the price for your product?”
How about asking the guy, “What’s the right price range?”
“Let me ask you, what’s the right price range?
What’s the price range you’re looking for and I can tell you if we’re typically
within that or not.”
Many times just asking a question back will work.
Sometimes it might not, the person might say, “Well, I’m not going to tell you the budget,”
blah, blah, blah, but now that’s good, now I’m getting some direction, the guy is awake
and engaged and most people will shy away from it and be like, “Oh, I pissed him off
and I turned an okay conversation into something negative.”
No!
You turned somebody that was just slightly disinterested into somebody that’s highly
engaged.
I think that’s a good thing.
Now if you take that energy that the guy puts into the call of being like all outraged and
you turn it around into interest and then into a productive and compelling call.
Once you truly understand what is their budget, what are their needs, what is the value that
I’m able to provide through our product and our service, then when you talk about
price, price is not a cost factor and your solution and what you do doesn’t turn into
a commodity, but now the price has turned into an investment.
An investment hopefully that pays returns and big returns.
Now when you talk about pricing, you can utilize that discussion for branding purposes and
for positioning yourself in the market, either there’s a premium solution or is the solution
that is the highest return on investment or whatever else the customer cares about and
it’s true and authentic with what your company is representing.
If you talk about price before you know what the value is you create, you’re talking
cost, commodity, you’re losing control.
When you talk price once you truly understand the prospect and customer, now price is an
investment, it’s a branding, it’s a positioning.
See how it turns from something negative and I’ll take your control to something positive
and empowering, something that strengthens your negotiations in the sales process.
Never, ever give away price without understanding your prospect.
All right, if you want to know more, shoot me an email at steli@Close.io.
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All right, go out there and hustle hard.
Go get them and close deals every single day.