Your Top 10 Ways to Answer the Question “But What’s My Price?”
From the very beginning of this article, we would like to explain that it is our overriding belief that as an entrepreneur, you absolutely deserve to earn a fair profit for the excellence you bring to the table for your clients. Even though you are the best at what you do, it’s bound to happen at some point: a prospect asks you to lower your rates or provide a discount of some kind.
If you have been to our Small Business Breakthrough Bootcamp you have heard my story about the two brothers who own an auto parts rebuilding company that were a promotional product client. They were nice guys, but made it impossible for me to make a profit because each time I brought them a promotional product marketing idea, their comment was “Yes, but what is OUR price?” They were also a client that I had to chase for payment, which lowered my profit even more. I finally gave them the business card of a competitor and stopped calling on them. The time spent, plus the discounts required, taught me that there is some kinds of business we should not go after. You cannot be everything to every client, if you want to stay in business.
Still, as many companies tighten their budgets fearing lean times, you may begin to receive discount requests more often. Whether you choose to work with a customer’s pricing requests or you stand firm on your pricing, you should always have a few responses ready. Inspired by Michael Pici, we share information gathering replies to use when you hear the words “It costs too much.”
1. “Good question. Do you see price being your major obstacle to our deal?”
Sometimes, prospects just want to know whether you will consider reducing your prices. If they can’t get a lower price, they will move on. Other times, they may be okay paying your rate, but interested in receiving a discount if they can. By asking this question, you help determine their motivation.
2. “We can definitely have a conversation about specific numbers, but let’s make sure we’re on the same page about this solution being a good fit for your needs.”
With this response, you don’t take a discount off the table, but you remind the prospect that it’s not relevant until you’re both sure it’s a good fit. If you grant their request too soon, you will seem overly eager to close, which will work against you during the actual negotiation.
Buyers sometimes haggle just for the sake of it. Oftentimes, those who say they are “just wondering” will pay your full price. It’s important to understand where your prospect is coming from and customize the value exchange.
4. “I can offer you a discount if you [extend your contract, pay in full up front, buy a higher quantity].”
Both parties should be prepared to compromise in a negotiation. If your customer or prospect asks for a discount, consider non-monetary requests that allow you to open the negotiating possibilities beyond price. Have you noticed that your cell phone companies offer you specials, but you must extend the term of your contract, usually by two more years?
5. “What would you consider a reasonable discount?”
This question allows you to discern whether your customer or prospect can afford your product, or they’re not sold on the full value. They might even be looking for a nice way to say “NO” to your offerings, so this acts as a reality test.
6. “Perhaps a different product might fit your needs better.”
If they don’t have the budget for your solution, offer a less expensive or less comprehensive option. We have four different coaching programs, so that a prospect can choose their own discount but understand that it comes with a lower level of service. The service you will offer is still incredible, it is just with less time, or features.
7. “What would need to happen to make our offering worth the investment you were quoted?”
This is a smart way to uncover gaps in your conversation and identify objections that may still exist. It’s a chance to add or reinforce the value your solution provides and to earn full price if you meet the prospect’s needs.
8. “What if we connect next quarter? Do you think you’d have more budget open up then?”
If your prospect is truly enthusiastic about working with you but simply doesn’t have the budget, consider leaving them in your sales funnel, and continue to follow up with them in the future. We have found that this can sometimes be the best option for our business and the prospect. You may want to do what we have done: add into your offerings that you do not want them to buy if it is financial hardship. It makes for a stronger long-term relationship, which, after all is what you are after. I remember using this tactic when I sold direct mail advertising for a weekly publication. If a small business owner did not have the budget to run ads the entire year, I helped them focus on one or two times a year when it would be the most beneficial for them to run ads with us.
9. Help your prospect find a way to pay for your services:
When asked for a discount, we remind our prospects that we have a referral program and that they could easily cover the investment of their coaching program by “not keeping us a secret.” You can check out how we run our program (and sign up!) at YuloffCreative.com/affiliate.
10. Offer a variety of products in your presentation.
When selling a product that has a wide variety of options, are you showing some of those variations when you sell? When a client asked me for a pen with their logo, I ask a few questions to narrow down what to share with them. You may have questions that help you, too. I ask: “Are they for mass distribution or to impress?” By finding out how the client is going to use the pen, I can narrow the range down.
Another example happened recently. We were shopping for a new microwave oven and the saleswoman asked ‘what is most important, price, power or other features?’ After I told her how good at sales she was, I was able to tell her that I wanted the least expensive microwave in this power range but it had to have a turntable.’ I was VERY happy with the 3 options she showed me and it was very easy to say “I’ll take that one” instead of “I have to shop around a bit.”
Your bonus tip for this article was found at the beginning of this paragraph. Value added bonuses are a much better way to satisfy a prospect that is intent on slashing your bottom line. Your challenge will be to find the thing you can offer as a value-added bonus rather than succumb to discounting. We can show you how to do that using content you already have, or can easily create.
Everybody wants a deal. In a tight market, you may be tempted to give in to the discount request from prospects. The smarter move is to have your responses ready when your customers ask for a deal. This is how you position yourself as a true value provider instead of selling yourself short.
There will be times when you may decide to walk away from a sale. Your peace of mind and your balance sheet deserve to both be positive. When that is a challenge you are facing, remember this article and that you were given permission to move on to the next prospect who will respect what you do and appreciate what you do for them. If you want help finding your line, your point of no return, connect with us at FreeMarketingConsultation.com and we will talk about how to properly set your sales parameters to ensure you continue to make the profit you deserve.