After checking in with your sales team, are you’re finding that they’re continually lowering the price of your service (to try and win business), and then you don’t win the business? It’s incredibly frustrating! It feels like you have done all the work but they’ve not got any result or reward for it.
This happens quite a lot and I want to give you some tips on how to overcome this happening.
The two key factors here that we’ve got to consider are:
- how do we make sure we don’t drop the price, and
- how do we ensure we win the deal?
DID YOU ASK ENOUGH QUESTIONS?
Did you ask enough questions about whether that company or person was a good fit?
If you’re trying to sell to everyone, it becomes really difficult to get the value that you want for the service that you offer. This is because you’re seen as a generalist rather than a specialist.
One of the key things I encourage people to do is to create what we call sales criteria.
This is a list of requirements that you want in a client, based on who you are perfect for. This doesn’t mean to say that you shouldn’t work for people that don’t meet the criteria, but it makes you then see whether they’re a good fit for you.
When there is a good fit, you are more inclined to see your rates rise (and not have to discount in order to win the business). When prospects are a good fit, they will think that they can get value from you. They will know you can deliver solutions for their key problems and challenges. This in turn helps you to build a rapport.
Did you ask enough questions about the fit? Do you even have criteria based on the ideal client that you want to work with to justify the price you’re charging? When there is a good fit, better rates happen.
DID YOU UNDERSTAND THEIR PAIN POINTS?
They must have a desire or a want in order to buy. If it’s pain, people are going to want to make that change more quickly. The questions, did you and your team probe and ask enough questions around the pain? (In an empathetic way of course).
I wrote another blog a few weeks ago based around LAPS – how you can listen, ask, probe and summarise. The key thing when you are engaging with a potential client is that you understand their pain and how it makes them feel emotionally (not just logically).
- What are the implications of the issues that they have?
- What is going to happen if they don’t get it resolved?
- How is it going to affect them personally?
- Could it cause them reputational damages if they don’t get it fixed?
When you know this information, and the question of price comes up, we can refer back to this conversation. “You wanted a discount here John, but when we talked two weeks ago you told me that this was critical for you. You said it was stopping you from sleeping at night. Surely, it’s worth investing to be able to get back a good position again?”
When we’ve understood the pain and probe in that area, it’s much easier to keep the price at the level you want it.
Focus on asking the questions that get to the pain point or the desire of what the person wants to achieve before you expect them to accept the price you want.
HAVE YOU OR YOUR TEAM ASKED ABOUT THE BUDGET?
BANT stands for Budget, Authority, Needs and Timing. It’s a key way to identify from your prospect how they feel about making an investment in your service.
When you ask questions such as “tell me a bit more about how you’re investing in this area”, “where have you previously invested in this area”, or “typically the investment for my services is between £X and £Y, how does that feel for you?”, you will get a sense of what the prospect is thinking.
When you start to ask those questions around budget, and ask them to tell you more about the financial return that they would like to see, then you will start to find out whether there is any alignment between what you’re charging and what they’re were expecting.
Although it’s important to ask questions about the budget, don’t just come out and say “What’s your budget?” They will never tell you that outright. Use effective questions to probe and find out. Don’t dodge the subject of money and budgets, it’s fundamental in business!
DID YOU RESPOND TO THE OBJECTION IN THE RIGHT WAY?
If someone says, “the price is too high, it’s not what I thought it was going to be”, this is an objection.
What your prospect is actually saying is, “I need further information” or, “show me something else before I make a commitment to doing that”. They are telling you in an indirect way that they are not quite there yet.
The wrong thing to do at this point is talk at them. Don’t say, “well, the reason our service is worth this amount is that we’re excellent and we’ve…”. It doesn’t matter, and you can’t overcome an objection by talking at it.
Instead, you need to keep probing.
When someone says to me “James, the price is too high”, I’d go back and say, “thanks ever so much for letting me know that. I really appreciate it, sounds like I’ve not been able to convince you of the value of this service. What would you need to see to feel it’s worth paying that amount for?”, or, “how far apart on price are we?”
We need to get inside the mind of our prospect to find out what they’re expecting, and hope that they are going to give you a number that is in line with what you can do. Only then can you try to put it together to make the deal happen.
If you’ve asked the questions around their suitability and budget in the initial stages, then hopefully this part of the conversation should be an easy one to deal with. It should be straight forward to say, “when we spoke a couple of weeks ago, we talked around the budget figures you were comfortable. What’s changed since then?”
Don’t ram information down their throats to overcome the objection. It doesn’t work. Make sure you ask the right question in the right way and find out what’s going on.
Acknowledge the fact they’ve not seen enough value, and find out what needs to happen to make them feel comfortable with that. Do that, and it’s going to get you the value for your services that you want to without having to discount.
Discounting the price and then not winning the business hurts us and makes us feel frustrated. We want to avoid that from happening by dealing with the objection the right way.
One final tip from me. If you continue to lower your price all the time, remember, it’s actually unfair on you, on your work, on the career you’ve built, and also unfair on your existing customers.
How would they feel if you said to them “I’ve just dropped my price to win a piece of business”? They would probably be frustrated too.
Another great response you can use is to say, “look, we can’t drop our prices. It’s not fair on our existing customers that we’ve worked with”. Always think about these elements and think about the reaction it would have for your existing customers. Lowering your price to win new business could end up causing you more problems down the line.
You want to avoid that happening, so make sure you consider these four things when you’re looking at the issues around price objections and people lowering the price to win business.
Make sure there’s a fit, make sure you’ve uncovered the pain, make sure you’ve discussed the budget issues, and make sure you’ve handled the objection correctly.
If you do that, you’re in a better position to get business at the levels and rates that you want.