Price can make or break a sale, and I don’t just mean the cost of your product or service… I mean the point in your sales funnel when you discuss it.
The price discussion needs to happen at some point in your sales funnel. After all, people are in your sales funnel to buy from you!
So when should the price be dealt with?
This is a hard question and (spoiler alert!) not one that I can easily answer in a single blog post. But my goal is to get you thinking about price in your sales funnel and help you to understand the role it plays. I’ll come back to this topic later.
DEAL WITH PRICE BEFORE THE TRANSACTION
At some point you need to deal with the price, and you should deal with it before the transaction. (Here are 5 ways to communicate price to your buyers). In very, very rare circumstances will you deal with someone who is willing to buy no matter what the price but those will often be luxury goods or basic goods and services during emergencies.
At any other time, if you fail to deal with price before the transaction, you will likely end up having to deal with it after… and it won’t be pleasant. (I learned this lesson the hard way, WAY back when I was the manager of a leasing company. I made the incorrect assumption that the customer knew the price before the transaction… and then suffered the consequences when it turned out that the customer didn’t know the price and expected to pay a fraction of the price. I will never ever forget that interaction… it was “interesting” to say the least).
PRICE WHEN IT APPEARS EARLIER IN YOUR SALES FUNNEL
You need to know who your buyers are when they first come into your funnel and you need to understand how price sensitive they are. Some buyers will only enter your funnel if you are the low cost provider (which I think is a bad idea — I don’t think you should compete on price). Even if you don’t compete on price, your leads will use price as an early way to sort and filter your messages, especially if they are shopping around.
If you’re going to talk about price early on, make sure you frame it in a way that explains the value and also gives you room for the price to potentially grow later. (That’s why we see car companies advertising “with prices starting at…”)
Also, an awareness of your prospective buyers and their buying concerns will help you explain the price of extras, such as shipping. This is a pain point for me early in a lot of sales funnels because I live in Canada so I want to know “if I buy this, how much extra will I need to pay to ship it to me?” Sometimes the price or time is inconsequential but sometimes it’s a lot. You may need to address this in your sales funnel if it is a factor.
PRICE WHEN IT APPEARS DEEPER IN YOUR SALES FUNNEL
The closer a prospective buyer gets to the transaction, they more they’ll think about price. In reality, most of them are not so much focused on the dollar sign (even if it seems like they are) but rather on weighing the value of trading their hard-earned dollars for whatever value your product or service claims to offer. Your customers may seem price sensitive but many of them are really value sensitive.
Again, the focus is on value but now you should start to get more specific in your pricing (unlike earlier in the sales funnel) and, chances are, the customer is looking for the answer “what will this ACTUALLY cost me?” — it’s important to be able to answer that clearly and honestly and accurately (and if you’re off of your quote by transaction time then you may have an upset customer who feels that you were dishonest).
Depending on what you sell, the price may fluctuate during the transaction. For example, if you offer a product and some up-sells, make sure it’s clear that the upsells actually cost money and don’t seem to be free bonuses. (It’s okay to call them “extras” and “bonuses” but just make it clear that the customer is actually paying more for them).
If the customer asks for more stuff during the transaction, make it clear that their request will impact price. I’ve seen plenty of times in other businesses when customers ask for extra service but then don’t calculate the impact on the price. (I don’t think they’re generally being dishonest and trying to get something for free — I think they’re just in a mindset where they aren’t really counting the actual cost).
Also, be careful of how you frame extra stuff like taxes and shipping. I think this is an area where Amazon struggles with their physical products: They give you the price of something, you buy a bunch of it, and then you see how much shipping adds to it and it can make your eyes bug out in shock.
Okay, I’ve shared a lot of thoughts so here’s a quick summary:
- Know your customer and what price sensitivities they have.
- Be willing to talk about price in your sales funnel.
- Always frame your price in the context of value.
- As people progress through your sales funnel, make sure your prices become more specific.
- Just before and during the transaction, be very clear about the price of any extras.