Where in your sales funnel do people think about price?

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.


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).


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.


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.

How to give customers amazing value without being the low-price provider

As much as possible, you should avoid being the low-price provider. That’s a game that no one wins: The low-priced provider attracts bottom-feeding customers that have zero loyalty. (Check out what else I’ve written about price and pricing strategies).

You should set your price at a point you can comfortably operate at and then build a case for value around your price.

But I frequently hear people talk about the problems in their industry and then claim that the only solution is to be the low-price provider since that’s what “all the customers” seem to want.

But this isn’t true. Most customers don’t want to spend the lowest price. (A very small handful do but most customers don’t). Instead, customers want to get the most value. They want to spend a reasonable amount and get a lot in return. (And some are willing to spend much more because they get way more in return).

Your job as a business owner is to find ways to build value into your offer that eclipses the price the customer is able to pay.

Here’s a really basic example: If your industry tends to sell widgets for $5 each because of the sheer price pressure, it’s okay for you to set your price at $10 per widget if you can prove to the prospective customer that they are getting $15 worth of value.

There are three components that need to be in place to make this work:


You need a core product or service that is as good as, or better than, what your customers can get from the low-priced provider. (If the quality is less than what they can get elsewhere then you’ll diminish your claim of value).


This is the biggest opportunity. Your low-priced competition might be churning out the products in an off-shore factory for fractions of a penny but what they can’t provide as well are some of the following:

  • Customization
  • Consultation
  • Support
  • Resources

These are very powerful ways to add value because they help the customer get more from your product or service by showing the customer how to use it better, by extending the product or service’s life cycle, by making the product or service more widely applicable in the customer’s life, and more.


Your sales funnel’s job is to show the customer not that your offering is low-priced but that your offering is of such an amazing value that they would be foolish to shop anywhere else, even if the price is lower.

And you really can’t do this enough. This isn’t something to downplay. You need to tell it and then tell it again and again and again. By the time your customer reaches the point of sale in your sales funnel, they should be frothing at the mouth and desperate for your offering.

Case study: Communicating through a sensitive topic

In business, it’s easy to communicate the fun stuff. “Great news! We’ve increased the your bandwidth!” or “Great news, that airplane seat actually costs less!”

But there are times when you need to deliver bad news to a client… and that’s when clients call me.

In the recent past, I’ve had 3 separate clients ask me to help them communicate bad news to their clients.

  • One software client was changing how their warranty period was charged and measured, which ultimately resulted in higher costs for customers.
  • An insurance client was asking its vendors to adopt a new and highly complex piece of software.
  • A client that sold online services was increasing their rate structure, even though they had already increased their rate structure earlier that year.

I always start by trying to understand both sides of the relationship. The party delivering the bad news has their reasons for having the bad news in the first place. (In my experience, businesses rarely try to screw with their customers and vendors without having a good reason!). And on the other side of the table, the party receiving the bad news brings their own set of biases and goals.

This is where most businesses fall short. They might want to do what’s right for all parties but their own goals are so embedded in their thinking that it’s hard to consider the other side. Perhaps that’s why they bring me — an outsider — in to help.

After thinking about what both parties want, I try to find something good. Something. Sometimes it’s hard but it’s never impossible.

  • In the case of the software company, there were aspects of the warranty that customers could customize.
  • In the case of the insurance company’s vendors, the software allowed for faster communication between the vendor and the company.
  • Even in the online services client, there was something good — although we had to create it: Rather than simply increasing the company’s rates across the board, we changed the conversation by creating new service tiers. The prices increased but so did the service and the perceived value.

The result? I was able to communicate through the sensitive issue for my clients and they came out the other side with customers and vendors intact and happy.

Aaron Hoos’ weekly reading list: ‘SharkNado, sales, and motivation’ edition

Aaron Hoos: Weekly reading list

I just realized that I missed last week’s “weekly reading list”. We had company over and their vehicle was broken into while we were sight-seeing, so that became our focus for the day: Unpacking their car, finding a repair place, keeping the kids out from underfoot while we solved those problems.

I’m back with more reading.

Here’s what I read this week:

  • Inventing SharkNado: Inside Syfy’s booming B-movie factory. On Thursday, I was totally focused on wrapping up a project and I worked late through the evening without checking Twitter. On Friday, I learned that I had missed the Entertainment Event of the Decade. (Just kidding). SharkNado aired on Syfy and although don’t get the channel (and have no desire to!) I also missed the flurry of Twitter activity about it until Friday. It was interesting. I was also fascinated to read this article in BusinessWeek, which talks about the Syfy Channel and their movie generating “factory”. The movies fill a niche and the system is really working for them.
  • The science of positive thinking. In this blog post at Huffington Post, writer James Clear describes what goes on in your mind when you think negative thoughts and when you think positive thoughts, and he shows how research has revealed that positive thinkers see greater possibilities in life. Maybe it’s time to start seeing the glass as half full… and maybe you’ll start seeing other opportunities as well!
  • The two most powerful words in content marketing. The Sales Lion is a blog started by a pool salesperson, so we get to see a lot of his sales-skill-thinking and how it has worked in the somewhat mundane world of pool sales. In this article, he writes about two words that have helped him make over $2 million in pool sales. The words are “it depends”. No, I’m not joking. And to be honest, I was not sure I agreed with him when he first revealed what the words were. but I definitely see his point and think that there are opportunities for entrepreneurs to create “it depends” content. Will be thinking about this a lot more!
  • How to live an unstoppable life. Dan Waldschmidt is a writer I really admire. In this blog post he writes about the inner fire that all marketers and entrepreneurs must have in order to push ahead. I found it to be a very inspiring post!

How to be the low-cost provider without charging the lowest price

I hear from businesses all the time about the challenge they face in competing against lower-cost competitors in the marketplace. It seems like businesses must choose to be either the low-cost version or the non-low-cost version. It doesn’t seem like there’s a middle ground…

… But there is a middle ground.

It is possible for you to be the low-cost provider without charging the lowest price.

It comes down to educating your prospects earlier in the sales funnel about the true price of the product or service they are shopping for, and then showing how your higher-priced product or service is actually a lower-priced option than the competitor with a seemingly lower price tag.

Let’s say that Competitor A is selling a product for $25, some assembly required. Meanwhile, Competitor B is selling their product for $50, installed.

A customer who is shopping for the most competitive price will look at the price differential — $25 versus $50 — and possibly choose the $25 option because it’s cheaper.

But is it really cheaper? They have to pick up the product at the store, ship it home, put it together, and install it — an effort that could take all day (and perhaps some additional costs in fuel for transporting the product). Factor in a little sweat and cursing and the annoyance of trying to interpret the assembly instructions, and suddenly that $50 is potentially a more attractive offer.

Unfortunately, businesses get caught up in price-tag comparison and they assume that their prospects are also doing that. It’s true, prospects ARE doing price-tag comparison… which is why the business needs to dial in more education earlier into the sales funnel. Marketing and sales efforts need to be directed toward educating prospects about the true cost of acquiring a product or service and showing how the price tag might be lower but the real cost of the cheaper option is much more expensive.

That’s why you can still offer your product as being the “lowest price” even when it’s higher than your competitors because the metric you are using to measure “price” factors in far more than just the number on the price tag.

To implement this in your own business, take a look around your marketplace and see who your low-price competitors are. Compare their offering to yours. In some cases, there might not be any difference; but there’s a good chance that there are many reasons why your higher-priced offer might still be a more attractive alternative. Then stop selling on price alone but bring the other qualities and benefits you offer into your marketing. Ensure that prospects are doing a full and fair comparison on the true costs instead of the price tag.