Think for a moment about the last sales deal you lost. Why did you lose? What was the reason? Were you late to the party? Was it the wrong product or solution?
If you ask most sales people what the number one reason that they lost a deal the majority will say price. In fact, in a recent poll of sales professionals conducted by Miller Heiman, an overwhelming majority of respondents perceived price to be the biggest cause of a lost sale. Additional research shows that 72% of salespeople cave in when the buyer resists price.
Unless you are without a doubt the lowest cost provider or producer, you cannot and should not sell merely on price. So, why is it that the first response of the majority of sales reps is to always reduce the price? We all know that while price can occasionally be a legitimate factor in a lost sale, it is never the only reason. If nobody wants what you’re selling, it doesn’t really matter what price you put on it.
What most people – your prospects included – really want is not necessarily the best price, but the best value. Value is the amount of benefit you get out of something vs. the total cost you’ll pay to get it. Bottom line (no pun intended), price is dependent upon value.
Our job as professional salespeople is to uncover what value means to a prospect, then to make sure our prospect understands that the value they’re getting from us exceeds the value they’d be getting from the alternative. By asking the right questions, your prospect will see both the value in solving their problem(s) and they will see the value in having a relationship with you. You are then in a position to help them justify a buying decision by adding more value, and thus reducing the price barrier. This all leads to a decision based on value and not on price.
As sales people, we are constantly faced with the pressure to negotiate price. All organizations and people will buy, and continue to buy, if they believe that value has been received as a result of the transaction. When faced with the proverbial price objection, steer the prospect away from the conversation of price and toward a discussion of VALUE.
What are your thoughts? Feel free to share your comments.