During economic contractions your clients are going to become more resistant, more selective and more fearful about how they spend their money. Consumers will only spend their money when the perceived value of your product or service is greater than the value of their money.
In this economy you'll probably hear the word "budget" every time you present a price. Don't buy into this as the objection; know that when you have a price objection, you really have an objection to value. The individuals and companies that do the best job of building and justifying the value proposition will be the winners.
What do you need to do to stay in front?
Realization No.1: Regardless of your product or service, regardless whether its cost is $8 or $8,000, for you and your people to succeed in this economy, you must do a superior job of demonstrating that the value of the product or service exceeds the value of your client's money.
If you're selling a $30 book, don't do a $30 presentation; it won't get the job done. Your job is to build value in excess of the price of the book. This might mean assuring your prospect that the book is easy to read, the information easy to implement and that the book that will get much use over the years to solve problems and make money for the client.
Let's say you are in the roof repair business and that the $8000 you charge might be hard for a consumer to part with. But what's the value of peace of mind? What's the value to customers of knowing that they and their family will be protected from the storms that are coming this winter; avoiding possible damage to floors, furniture and walls (damages not covered by insurance) and protecting their investment in their home? This is the kind of presentation it takes to build value in a way that exceeds all objections your client may have about the cost.
Realization No. 2: Don't believe that people aren't spending money. Despite all the bad news, it's critical that you and your people don't buy into that. Spending is instilled deeply into the American psyche, and not even the nastiest of recessions can't stop the propensity to purchase. When the remodel of the house, the new car, the watch or the roof repair proposition is alluring enough, the buyer will spend money. The savings rate in the USA is now at the highest level in 25 years. So while credit is restricted, more cash is available.
Realization No. 3: Eliminate lower price as a way to build value, and don't confuse value with a lower price. Again, instill this belief in your people. You're not Walmart, so don't try the lower-price formula or you'll find yourself in a grave. Lowering your price may work temporarily, but it's not a successful formula for growing profits. During an economic contraction, volume of sales will go down. Combine that with lower profits, and you're inviting disaster. Lower price is only a solution for those who cannot build value.
Realization No. 4: Predict the price objection and handle it as a complaint, not as a rejection. In this economy you are going to hear about a tight budget or other price objections almost every time you present the price. "The price is too high" really means, "I think I'm better off with my money than I am with your product."
Commit to the value proposition, don't use lower price as a solution, eliminate the self-defeating thought that people aren't spending anymore, and never treat a price objection as anything more than a complaint. Remember: When the value of your product exceeds the value of their money, you'll get the sale.
Grant Cardone is an author and sales expert with 25 years experience consulting businesses on how to increase sales. He's a regular contributor at The Huffington Post and Fox Business. His sales, finance and business advice has been covered by CNN, Today Show, CNBC, Wall Street Journal and more than 600 radio shows just this year. Preview his most recent book,Sell to Survive or contact Grant at firstname.lastname@example.org.
The author is an Entrepreneur contributor. The opinions expressed are those of the writer.
Grant Cardone is an international sales expert, New York Times best-selling author, and radio show host of The Cardone Zone. He has founded three companies: Cardone Enterprises, Cardone Real Estate Holdings, and the Cardone Group. He has shared his sales and business expertise as a motivational speaker and author of five books: Sell to Survive; The Closers Survival Guide; If You're Not First, You're Last; The 10X Rule; and Sell or Be Sold.