Is Price Losing You Sales?

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It can be the most frustrating thing in sales when a customer shows a ton of interest, and then at the last minute they find a solution elsewhere for a few dollars less, and you lose out on the sale after working with the customer to make sure the product is a good fit for them. 

If you’ve been in this situation, you know how discouraging it can be to lose a potential sale based solely on price! 

So, would you like a few tips on trying to avoid this from happening to you in the future? 

Numbers Are Negotiable, Specifications Aren’t 

This is typically more true for B2B sales, especially if the salesperson has autonomy in regard to negotiating special pricing with a customer. 

What I mean by this, specifically, is to avoid discussing pricing with a customer up front, especially if they ask about it. 

Why?

The main reason is, if a customer feels as though a product is outside of their budget, they will not listen as intently to all the great features and value your product can bring!

That means the pricing discussion should be saved for last, whenever possible. 

But how exactly can you allow for that? If the customer asks about pricing, you shouldn’t just ignore them, right? 

That is correct! You don’t want to ignore them. You want to answer the question with empathy. 

I typically say something like, “before we discuss pricing, let’s make sure this solution actually makes sense for what you need, and make sure it’s the right fit for you. Numbers are always negotiable, product specifications aren’t.” 

This is typically met with little to no resistance, and the customer actually appreciates that type of response. 

They appreciate it because it’s sort of comical to say that prices are negotiable but specifications are not, and also because it shows that you are not just concerned with talking about money. You are putting the importance of their needs over the money you stand to make on the sale. 

What if They Request a Discount?

This will usually happen if you are speaking with an OEM type account, or any type of customer who is looking to buy and resell your product. 

Or, it could also happen if your customer is an end user who plans on buying a large quantity of product. It makes sense, right? The purchasing manager’s job is to ensure they are saving their company some money, so it’s best to work with them, not against them. 

The most important thing with negotiating pricing is settling on a number that makes sense for both parties. The customer wants to feel as though they are getting a special deal, but the salesperson needs to make money for the company without “giving the house away”. 

For example, let’s say you offer the customer, in your first round of negotiations, a 10% discount to satisfy their question. But, what if they typically get offered a slightly higher discount, and 10% is more of an insult than anything?

That does happen! I wouldn’t be surprised to hear you’ve been in this exact position. I know I certainly have when I was first starting out in sales! 

So, rather than offering them a number they may not like, I actually make them part of the decision making process. I allow them to make the decision on pricing. I put the customer in a position of empowerment, and if you want to sell with empathy, you should as well! 

When they ask about “their price”, I will typically say, “what sort of pricing would you need to justify moving forward with this project?” 

This does a few different things for you and for the customer. 

Firstly, it allows the customer to actually think about that for a minute. You see, typically when a customer asks for a discount, it’s just something they are trained to do, and so they just ask about it without actually thinking it through. 

They will talk through the various elements of the project, and will reveal if they have to offer up any margin to resellers or OEM’s in their sales channel as well. 

And, if their answer is a lot lower than what you would have initially offered them in the first place, you actually get to make more money for the company while letting the customer get what they wanted! It’s a win-win! 

Lastly, if you agree to the pricing they asked for, then that makes them feel really great about doing business with you. Instead of trying to negotiate further and get the numbers to be more in your favor, they will appreciate you just agreeing to the number they present to you. 

But again, whenever possible, this conversation should still take place after you have both identified a solution that will fit their needs. 

Uh Oh, They Found a Less Expensive Competitor!

Oh yeah, that happens quite often in sales, and it can be rather frustrating as well. Regardless of your product or industry, there is most likely going to be a competitor of yours who is able to sell a similar product for less than what you can offer. 

But that doesn’t mean it’s impossible for you to compete with them, right? 

There are a lot of reasons why a customer does business with a particular company or salesperson, and pricing can be the least important reason. At least, it should be, and a lot of times it is. 

Think of the reasons why you are loyal to a specific brand that offers high quality products. 

Let’s assume you’re reading this on the new iPhone. 

Now, you could get a less expensive smartphone that is just as capable, right? You could buy an LG branded phone for less than an iPhone, and actually most of the Samsung phones on the market are less expensive. 

Also, the price of smartphones increases every year, and they aren’t coming down any time soon. 

But, you stick with your favorite Apple brand, and just fork over the cash regardless of how hefty the price tag is because you are loyal to the brand and have an emotional attachment to the products they produce. 

So, what are some of the reasons you pay for the much more expensive iPhone? 

• The quality of the product is ridiculously good

• The customer service for Apple is practically unmatched 

• The phone integrates with almost all the other electronics you own

• The user interface is extremely easy, and familiar to you

• Security on an iPhone is unmatched by other brands

The ironic part is, I’m actually not a fan of Apple products, but I have a strong understanding of brand loyalty, and why people are willing to spend more money on a phone made by Apple than a phone made by a less expensive brand. 

The point is, the customer finding a less expensive competitive product is not always the end of the world, and it doesn’t mean you have to immediately offer to match the pricing. 

Rather, it’s the perfect opportunity to remind your customer why they like to do business with your company, and you in particular. If you follow my advice, and always sell with empathy, you should have a really strong relationship with them, and that could be reason enough to not worry about a less expensive option they could source elsewhere. 

What are some of the things you and your company offer to your customer that money simply can’t buy?

CONCLUSION

Personally, I hate having an opportunity slip through my hands because of pricing. There are things I can do to help prevent it from happening, but it’s not avoidable every single time. Sometimes, the customer has a specific budget, and they just can’t justify spending more. 

For the most part, pricing should never be a reason to lose a deal, and you should try to save the conversation about price until the end. 

Make sure the product will solve the customer’s problems correctly, and make sure it’s the perfect solution for them before you discuss any type of special pricing. 

A major reason this works is because it allows you more time to discuss how the product works, and the various values the product provides. There is a good chance that by simply focusing more on the features and values, the customer will actually realize they are getting a good deal because the product is THAT good - regardless of the price tag. 

I want to hear from you! Has pricing been a major reason for losing any deals for you?

If so, do you think these tips could help you avoid that from happening in the future?

Either way, send me a quick message on LinkedIn today!