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The Price Is Right

Price is often the first thing on your customers' minds--so you need to think about it, too. Name your best price with these key strategies.
May 1, 2005
URL: http://www.entrepreneur.com/article/77314

There are very few hard-and-fast rules in sales, but here's one that is true 99 percent of the time: If you focus solely on price when selling your product or service, so will your customers. Unless you can distinguish your product from its competition, the product with the lowest price will get the sale.

Because everyone's concerned with money, you can expect to hear price objections from customers at least once in a while. The key to avoiding objections is making sure customers know what they're getting for the dollars they're investing.

Bart McConley, a friend of mine, is the general sales manager of the Warnock Automotive Group, which has dealerships in East Hanover, Livingston and Morristown, New Jersey. If anyone knows about price objections and negotiations, it's someone who runs a successful car dealership. His take on price objections? "It's all about perception," he says. Many car salespeople lower the price in the parking lot before the customer even gets into the car. What's the customer left to think about the value he's getting?

McConley's right. Here are four things I've learned about price objections:

1. Sell your true value. Never apologize for the price of your product. Provide your price, and stand strong on it. You can only do that, however, if you have the backup information necessary to support your price. Always be armed with at least three key reasons that make you unique, distinguish you from the competition and give your product added value. Your main goal is to help the customer understand the true value of what you're selling.

2. Generate enough activity so you can afford to walk away from customers who don't see your value. If you've got just one prospect, you're going to want to make that sale no matter how much you have to lower your price. When you already have many prospects in line, however, you can stand your ground knowing that if this sale doesn't work out, another one will. If you're constantly discounting your price, the perception of potential customers is that you're undervaluing not only your product, but also yourself.

3. Know when to negotiate. If, for instance, you're working on a new product launch with an account, and a lower price might help them enter the marketplace with a greater chance to succeed, it will also help your success in the long run. Or if a customer is willing to buy volume, you might negotiate your price. Flexibility is based on creating ROI and long-term, profitable relationships.

4. Be confident. In essence, your customers are asking you, "If I'm paying more for your product, what other value am I getting for that investment?" It's not just showing them the additional value they're getting for their investment. More important, it's the confidence in your approach that makes them feel comfortable doing business with you.

Your confidence is the most powerful tool you have when handling price objections. If you're confident enough to overcome the fear of losing the sale, you can remain firm in the face of any objection. Confidence breeds success, especially where price is concerned.