When it comes to price there are a lot of opinions out there. If there is one thing most professionals agree on, it’s that price is important, but the price of not selling value is even higher.
When you’re not selling value you can potentially erode your margin, commoditise your service or product and leave yourself in a vulnerable price comparison battle with other competitors.
There is always the danger of falling into the trap of being price led by the customer out the fear of losing the sale, losing out to a competitor, not making target or commission. I personally know that feeling.
I do recognise there are a range of different products and services out there that are less expensive than others in different categories. I’m not against being less expensive or cheaper. I’m against having price with no value.
What do I mean? Price with no value is where a product or service offers no clearly differentiated or personalised benefit to your customer. All your customer sees is a price, a range of features and generic benefits. That for me is product or service that has a price with no value.
Whatever the stage in your client relationships or decision making with your customer, at some point you’ll deal with price.
The question here is not price, but rather its price with no value.
How do we ensure we don’t fall into those price led traps? and build relevant value into our products and services in our customer conversations?
I’ve got three ideas I’d like to share to help prepare you for those client conversations so you can deliver value that matters to your customer and eliminate more of those barriers to the sale.
Know why your customer is buying, who for and who they need to please
We all recognise the buying landscape is different and in most cases your client contact has more than you to deal with in their business. The better you can understand why they’re buying, who for and who they need to please the more able you are to create value that matters to them today. You can position the right messaging, prepare the right resources, know what level of influence you need, offer the right level of support to reduce the risk to them and increase the perceived value to their business and your contacts stakeholders.
Build value before you get to the conversation
When we’re sharing new ideas or uncovering new projects with our client we all know when the pricing conversation will happen. How we get there is just as important as what we do when we are there. How can we build value up to that conversation so we have less potential buying resistance? For example. If you’re presenting a new project to your client we can reduce potential risk to purchase by sharing the story of other customers better yet getting them on a call together. You can also demonstrate and personalise the steps to implementation so your customer has a clear view of what success looks like, the potential challenges, how you overcome them and the result at the end. Both of these are very powerful steps when done right and can significantly reduce the sales cycle.
Don’t be afraid to start again
One of the most frustrating things to happen in the sales process is getting to the end and having to redo proposals. Sometimes even with the best process and all the right consultation you have to be prepared that things may change. When presenting proposals to your client there are a number of ways to approach it. The Goldilocks principle is a popular one. This is where you present a package of proposals offering high, medium and low options with the hope your client will pick the medium one at least. I’ll admit that it can work but I never really understood why you would offer options that didn’t deliver the full outcomes needed for your customer to win.
Here’s what I’d invite you to consider. Once you’ve gone through the steps of truly understanding your client’s needs and presenting the proposal, if you still get a NO ask them these two questions “What one thing would you change about the proposal?” and “If we had to start again what other things would we need to consider to get this right for you and your stakeholders?”. Sit back and listen. You’ll be surprised with the great stuff you’ll hear. The next step is going back to build the proposal with them but this time getting small commitments along the way by being transparent with what the investment might be and building it appropriately. Sometimes starting again can be a blessing in disguise as you can discover more opportunities to help.
The big thing I wanted to do here was to stimulate thinking. The relative price of your product doesn’t matter if it is a truly differentiated offering that really solves your customer’s problem. It’s price with no value that makes the difference not just price.
What are your thoughts on this?