<img src="https://d5nxst8fruw4z.cloudfront.net/atrk.gif?account=2LgIl1aQibl0vg" style="display:none" height="1" width="1" alt="">
Megan Prangley
by Megan Prangley
on June 1, 2017

Imagine two identical ice cream cones looking delicious in the hot Summer sun; one costs two dollars and the other costs ten. Which would you choose to buy? The answer is obvious, the cheaper cone because nobody likes to pay more than they have to, and in today's digital world customers can easily compare prices to get the best deal. They can tell when one vendor, product, or solution costs more than a competitor's, so how can you empower your sales team to navigate this hurdle?

Know Your Target Persona

Not every lead is right for your business; your sales team needs to find the right leads and that will help open the price discussion. Don't pursue a budget-broke startup if your buyer personas dictate you work with established companies that are making over a million a year. Outlining your personas and identifying good leads for your business early-on will make the price discussion easier to bridge. It's a huge waste of time and money to chase leads that don't even have the budget for your services. 

Focus on Value

When your solution is more money than the other guys, you need to help the prospect understand why that's the case. Is the product made in America? Do you employ rigorous quality testing? Is there a product warranty? Do you have a 24-hour customer service hotline to answer immediate questions?

In a nutshell, how does the value you offer outweigh the lower-price option? Make sure your salespeople have a clear answer about value, as well as content and resources to back up those claims. The information and answers on your website should provide enough evidence to justify the price. 

Lower the Risk

One thing businesses like to avoid is risk. Owners are willing to pay more for an option with inherently less risk and a higher rate of success. Think about the ice cream example again, would you rather pay less for a soggy cone that drips all over your pants and ruins them, or a bit more for a homemade waffle cone? If you can demonstrate the ROI and lower risk of working with your company, people are more likely to overlook your price tag. Having customer testimonials, reviews, and credible industry awards available to view on your site helps to educate prospects on your value and reduced risk. 

Try the Contrast Effect

After all of those tactics, you could try using The Contrast Effect. Introduce a higher-priced product and compare it to the option you'd like to sell more of. Perhaps you've heard of the classic example from Williams-Sonoma? As they were trying to sell bread-making machines for $275, they introduced another model for $429 and after adding the more expensive appliance, sales of the $275 bread-maker doubled! Adding an even more expensive option can help make your "bread-and-butter" solutions look like a better deal in comparison. 

The Contrast Effect (1).jpg

Be Confident

The last place to get defensive or nervous is when you are presenting the price of your goods and services. Market research and industry benchmarks have informed your pricing strategy, and if you're confident your solutions are fairly priced, don't back down right away or jump into negotiations too quickly. The last impression you want to give is that your services are cheaper or worth less than you've described.

One of the most dreaded phrases in sales, "that's too expensive," can be navigated by driving the conversation towards value and risk. Equip your sales team with the necessary decision-level content to show your differentiators and success stories to reduce the risk for prospects. Being the "cheapest" option isn't always the most important factor, being the business with the highest value for their clients is a sweet spot to be in. 

 

Sources: 

Kissmetrics 

HubSpot

inbound marketing strategy

Related Posts In Sales Cycle

Selling Tips For When You’re the Most Expensive Player in the Game.jpg
HOW TO CREATE YOUR INBOUND MARKETING STRATEGY
Let us help guide you through creating an entire inbound marketing process for your business.