Price will always be a deciding factor in every sale… to some degree.
The reason is that buyers unconsciously have a price they are willing to pay to solve their problems or fulfill their needs. The more acute their problem or need, the more they are willing to spend. (Your job as a business owner is not only to explain the benefits of the product or service you are selling but also to show how acute the prospect’s problem or need is and the true cost they’ll experience if they don’t act now to solve the problem or fulfill the need).
Price might be a deciding factor in every sale but it’s only a problem for you if price is the final deciding factor.
If price is the final deciding factor, it means that the potential buyer doesn’t see a difference between you and your competitors and they are simply using the dollar value of the product or service as the way to decide. In those cases, cheaper almost always wins.
Unfortunately, businesses fall into the trap of competing on price (hey, “low cost provider” doesn’t sound too bad, does it?) And, business owners fear the money conversation so they leave it to the very end, just moments before they hope to close the sale.
Here’s how to fix the problem:
- Make sure you are selling to a well-defined target market. The wrong audience will not see all of the value that you provide so they’ll end up measuring your product or service by the only value they understand: Price.
- Understand that YOU set the sales agenda. So decide where the money conversation goes. If it really does come down to money for the buyer (i.e., they have no other factors and are only looking for the low cost provider) then you’ll at least get rid of them so you can focus your efforts on someone who qualifies to be your customer.
- Get over your fear of the money conversation. The customer knows that they have to pay… and one of the things they care about is how much it costs. So get it out there. There are lots of ways to wrap the money conversation in a conversation about benefits. I can’t tell you how many times a potential customer has walked away from the negotiating table with me because the price was too high… only to come back later when they looked around and saw other service providers in the market (or, worse yet, when they hired someone who didn’t deliver).
- Price does play a part in the buying decision so make sure your pricing strategy is sound.
- Revisit the value you provide (in your copywriting, your marketing, your value propositions, your USPs, etc.) You should overwhelm your potential buyer with value. Then price becomes a minimal deciding factor.
- Differentiate. I’ve written about differentiation quite a bit. You can differentiate your business and your product or service. Too many businesses want to serve all markets (or don’t want to ignore a market) so they trend toward the middle — the vanilla. But buyers love and respond to differentiated businesses.