Why Your Lowest Price Can Be a Barrier to Closing Sales

Posted by Dave Kurlan on Thu, Aug 02, 2012 @ 17:08 PM

Price Comparison and Sales ContextIt's not really the price as much as it's the context for which that price is provided.  Let's take mobile apps for example.

$9.99 on its own seems very inexpensive, but with apps available for $3.99, $1.99, $.99 and even free, it's expensive - by comparison.  Look at the moon - we think it's fairly large, but when you look at it in comparison to Earth and Mercury's moon, it's a blip in the sky!

Let's look at a more complex service with a much higher price tag.  If the salesperson says that their solution is only $5,000 per person, the prospect immediately views this as an expense - and a costly one at that.  How can they justify spending on average $5,000 per person?  However, if the salesperson says, "We can help you recover $3 million in lost revenue and solve your customer retention problem for around $50,000 over the next 8-12 months", it sounds like a bargain and a no-brainer.  The reality is that the $50,000 solution could be more costly even than the $5,000 per person solution.  But the context, the perceived value and expected result are different.

It's not about prices, presentations or building value; it's about putting prices in the context of what those prices will buy.  Compare the two examples above and you'll see both the answer and the obstacle.  The answer is the context.  The obstacle is that your salespeople may not be learning what the compelling reason is for their prospects to spend the money.  Without the compelling reason, it's impossible to replace the red-bolded words above with the words your salespeople need to use.

Another potential obstacle, but hidden this time, is that some of your salespeople are uncomfortable having financial discussions with their prospects.  Those salespeople won't be able to get to the quantification of the problem.  And what about the salespeople who need to be liked?  They can't ask the tough questions and become emotional if they go out on a limb and ask.  These are three of the many hidden weaknesses that OMG often finds when evaluating sales forces.

You can teach and coach on most strategies and tactics, but when your salespeople aren't able to execute one that was properly introduced and demonstrated through role-play, you can be sure that there is a hidden weakness to blame.

Topics: sales competencies, sales culture, sales assessment, Dave Kurlan, sales force evaluation, sales training, sales evaluation, sales personality, hidden sales weaknesses, selling value, overcoming price objections

Subscribe via Email

View All 2,000 Articles published by Dave

About Dave

Best-Selling Author, Keynote Speaker and Sales Thought Leader,  Dave Kurlan's Understanding the Sales Force Blog earned awards for the Top Sales & Marketing Blog for eleven consecutive years and of the more than 2,000 articles Dave has published, many of the articles have also earned awards.

Email Dave

View Dave Kurlan's LinkedIn profile View Dave Kurlan's profile

Subscribe 

Receive new articles via email
Subscribe
 to the Blog on your Kindle 

 

 

Most Recent Articles

Awards  

Top 50 Sales & Marketing Blogs 2021

Sales & Marketing Hall of Fame Inductee

Hall of Fame



 Hall of Fame

2020-Bronze-Blog

Top Blog Post

Expert Insights

Top 50 most innovative sales bloggers

Top100SalesInfluencersOnTwitter

Top Blog

Hubspot Top 25 Blogs

 

2021 Top20 Web Large_assessment_eval