Hot off the presses...the Fall Edition of The Sandler Advisor. Click here to read.
Please enjoy this newsletter excerpt, highlighting when and how to talk about money
with a prospect.
The Two-Minute Coach
By Howard Goldstein, Sandler Corporate
Today’s question comes from Tracy, the owner of a graphics design company for which she does most of the selling. This is how she explains her problem:
We sell a fair number of corporate identity packages from leads generated on our website. I typically close 60-70% of those leads.
The price range for the three packages we offer are clearly stated on the site. When I first talk with prospects who find us via the web, I ask them if they are aware of the pricing for the different packages. Even if they say “yes,” which they almost always do, I quickly review the pricing for each package. At that point, they will typically choose one. Once again, I’ll review the price for the chosen package and ask them if they are OK with it.
At the second meeting, I present them with two variations to pick from, and they have no trouble choosing one of them. They always tell me how pleased they are with my designs, and then, in the same breath, tell me that my price is a bit more than they are prepared to pay. These are the very same people who told me at our initial meeting that the price for the package they chose was “OK.”
Even though I close most of the sales after some “negotiating,” I know I’m unnecessarily giving away profit. What should I do?
Tracy, your instinct to ask if prospects are aware of your pricing is correct. However, you need to go a bit further. Being aware of your pricing, even being “OK” with it, doesn’t mean they are willing to pay it. From what you describe, for many of your prospects, your price range is “OK” in the sense that it’s an OK place from which to start negotiating.
Before you begin working up designs for prospects, review what they want and why they want it. Essentially, reaffirm the importance of obtaining a top quality design.
Then, confirm that the investment they are prepared to make is indeed within the range you charge. Here is what you might say/ask (inserting the appropriate investment amount):
I’ll work up two designs from which you can choose. If you choose one, are you going to be 100% comfortable making a $_____ investment? If not, we should talk about that now. Would you like to start?
If you are going to have a “discussion” about price, the time to have it is BEFORE you begin working up designs. Once a prospect says that he or she is 100% comfortable with your price, you have effectively taken the heretofore inevitable “your price is too high” objection off the table.
Salespeople (and perhaps you, too, Tracy) have all sorts of notions about what would happen if they attempted to discuss budget, fees, funding, investments, etc. before presenting something that would justify an amount. Rarely are the scenarios they conjure up positive ones.
I suppose the scenarios emanate from a belief that prospects view the selling interaction as primarily one-sided. That is, one per¬son wins at the other person’s expense. Consequently, salespeople reason that asking about budget before showing anything to substantiate any size investment would be interpreted by the prospect as a tactic to get the upper hand. So, to avoid being characterized as a manipulative salesperson, they don’t ask.
But, “ask” is exactly what they (and you) must do.
Tracy, to avoid being “nailed” on price when you are attempting to close the sale, nail it down before you begin working up designs. You may be a bit uncomfortable at first, but your profit margin will be the beneficiary of your efforts.
To read more, click here.
WHAT SUCCESS LOOKS LIKE
Sandler is celebrating success, and we're pretty excited about it! Share your story and continue the conversation using #HowToSucceed.