Early in my sales career I often found myself haggling with customers over price. It usually resulted in me handing out some ridiculous discount just to get the deal done.
It was frustrating and I didn’t know how to fix it…
I was tangled in the bloody water of price battling, and it got ugly… I needed a solution.
After weeks of study, and a lot of trial and error, these were the 4 steps that saved me from giving away the farm:
1 – Know their Options Better Than They Do
First I needed to learn what my prospect’s alternative options are. There are two alternatives I needed to know inside and out in order to confidently hold to my price:
- The Prospect’s potential cost of doing nothing
- The Prospect’s cost of using a competitor’s solution
Knowing with certainty that my offer was not only competitive, but a no-brainer in terms of lifetime value add, was a massive first step in confidently holding my ground on price.
If on the other hand you know it’s not a compelling offer… maybe it’s time to work for the competition. Just sayin’.
2 – Find the Right Bullet
Bullet Theory says it only takes 1 well place bullet to capture the prize.
Click Here For More On Bullet Theory
If you are frequently haggling with prospects over price, you’ve probably gone for the close before showing any value that resonates with them.
You may have told them all the reasons you believe your offering is valuable, but those are not the reasons that matter to them.
If what the customer values most is the lowest possible price, than maybe yours is not the right offer for them. And that’s fine…
But typically what customers really want is not the lowest price, but the best lifetime value for their money. Figure out what is most important to them and lead with that.
I can’t tell you how many times I felt like I was getting no where in a sale, when suddenly every thing would change simply because I struck an emotional chord with something they value.
Price was no longer an issue, and features they didn’t care about 2 min before, were suddenly the points they were using to sell their spouse on the idea.
That resonating benefit changed from customer to customer, so my job became more of a detective trying to uncover their values and match them with my offering.
3 – Anchors
If you aren’t using price anchors before you unveil the price, you aren’t using one of the most powerful tools on the planet to help make your price woes disappear.
It’s no coincidence that EVERY INFOMERCIAL EVER MADE ON THE PLANET USES PRICE ANCHORS... They make people buy stuff.
A price anchor really simply put, is a relative starting point. It’s a justified price point that sets a standard (or anchor) to which the customer will compare your price.
Example: “Similar products sell for $1200 to fill this need. We thought that was a little high so our price is $999, but since (insert reason to do business today), we are able to that for you today for $650. [Insert customer gasp!]
The reason anchors work is based on some basic human psychology…
Our brains don’t store absolute values for anything. They just don’t.
We are better described as comparing machines than calculating machines. Our minds can compare distance, for example, far better than we can measure them.
We see value by comparing an option to the alternative. When you provide the anchor, you provide the measuring stick.
4 – Keep It Random
If at all possible, avoid round numbers or anything that ends in 9. I understand it sounds strange but the human mind is a strange place.
This odd fact works for two reasons that I am aware of:
1 – Fewer Comparables
Keep in mind that our brains are great comparing machines. Your brain contains a folder labeled “$199”, which contains all things things you can buy for $199.
If someone offers you a product for $199, your brain opens the $199 folder to compare it with everything else in their to see if it’s worth it.
Elsewhere in your mind, lies a relatively empty folder, with very few items in it. It’s the folder labeled “$192″. As strange as it sounds, mentally it’s just not as competitive a space. Your mind just has less things to directly compare it to.
This is honestly the reason over the past few years why 7 has become the new 9.
2 – Obscure Numbers Appear More Legitimate and Less Flexible
The second reason is that people simply prefer round numbers. If given the choice, why would anyone choose an obscure number?
Since they feel wrong, subconsciously we assume that it must be that way for a very good reason… Otherwise why wouldn’t it be rounded to a more pleasant number?
There is a strange legitimacy to obscure numbers that makes very few people question them.
You should absolutely run your own A/B testing… but if I were a betting man…
I’d wagger you’ll find less resistance to price on an obscure number.
I’ve put this principle to test in dozens of offers over the years with the same results.
Put these 4 steps to work in your own sales, and watch your price struggles dramatically decrease.
