Before you start reading . . . let us agree on something. If you promise to read this entire piece (end-to-end) we will promise that nothing in it will be news to you. Do we have a deal? Nothing new here! Then why should I read it? (great question). You should read this because there are times when you believe you lost a sale because your product or service was more expensive than your competitor. This will be a fantastic review AND you need to be reminded of these things from time to time.
If you sell the most expensive product or service in the market (or one of the most expensive), congratulations! Anyone can sell the least expensive product – just give it away and hope it works. Not a strong strategy for consistent growth. Congrats!
The challenge comes when your product is more expensive (and worth it) but your prospect does not see the value – and is not connecting the dots as to why you charge more. This takes special selling skills (but nothing new). Here are six suggestions to help you sell the most expensive product on the market:
- Ask about the competition early (if you do not already know)
Salespeople often wait too long before asking about the competition (if at all). Especially if you sell a premium product, you want to ask prospects who else they are considering early. But questions like, “What do you like about Company X?” will not get you much valuable information. Instead, ask one of the following questions:
- “Which company is winning (or leading) as we stand today?” Get your prospect used to thinking in terms of “winning” and “losing.” This will reveal who they prefer, regardless of price. Remember: Prospects will never buy from your company unless they are comfortable with you and see you as having more value than the competition. If you are not “winning,” price is a moot point. If you are winning, you can work on the price.
- “Where are you in the buying process with competitor X?” Make sure you know the competitor’s sales process. This can alert you to situations where you are being used as the third quote just to justify the decision.
- “Who is the internal champion for competitor X?” In order to neutralize objections to your product from stakeholders, you must be aware of them in real time. Discover who is pulling for your competition and reach out to them directly. Of course, they may not tell you – but you must ask.
- Eliminate less reputable and lesser quality competitors
Let us say you are in an RFP process with two other companies. Company A has a low-cost, low-quality product. You rarely lose deals to Company A. On the other hand, Company B is a competitor you run into often and have lost deals to in the past. In a three-way heat, you want to help your buyer eliminate one option as quickly as possible. If the question were, which would you eliminate? Most salespeople would say Company B because they have a better chance of winning against Company A. But this is actually the wrong answer – you should rather stand with Company B. Why? Because you then put yourself in what buyers consider the pool of quality.
If you can help your customer to get rid of poor-quality options early on, you will find you strengthen your sales argument later in the process – and you will not be faced with struggling to match crazy low prices.
- Get the number
As the buying processes progresses, you might be asked to talk discounts. You know there are many proven tactics to justify a higher price (calculating ROI, emphasizing value, etc.). But when push comes to shove, salespeople need to get prospects to say the number they are looking for instead of blindly throwing out prices. First things first: NEVER offer a discount unless you know for sure that your company is “winning” in the prospect’s mind. Once you have the prospect’s assurance that you are in the lead, you can talk about price.
Prospects often try to play companies against each other on price, saying things like, “Well, we like you guys better but Competitor X costs 25% less. If you can match that price, the business is yours.” As soon as they hear a sentence like this, most salespeople go running for their manager’s approval. But this is not the only way. Here is what we would recommend instead:
Prospect: “Well, we like you guys better but Competitor X costs 25% less. If you can match that price, the business is yours.”
Salesperson: “How did you get that 25% number?”
Prospect: “That’s what Competitor X told us was their price.”
Salesperson: “Hmm… well, you know we’re not going to match that price, so what’s the real number you want to see from us?”
Example: Mercedes does not compete with Kia on price. So, you should not compete on price with a clearly inferior product. Before you start negotiating, you must prevent the buyer from using the competitor’s price as a baseline and get them to commit to a “real” number. After all, there is no comparison between the two products – and this holds for price too. Make this crystal clear to the prospect and negotiate from there.
- Tell stories of how low-cost products let the company down
If a prospect buys a product based on price alone, it is safe to say that it is a bad decision. There is a reason some companies are cheap – they tend to be inferior (low quality). Early in the sales process, get your champion to tell you stories of when decisions made solely based on price negatively impacted the company. Everyone is bound to have a few. Then, when the sales process is wrapping up, you can remind the prospect (with their own words) that choices made to save money often end up costing money. Most people will not argue with themselves.
- Use examples of customers who regretted their choice
Along similar lines, a story about a company that opted for another product and wished they had not is extremely powerful. Suddenly, it is not your word against your competitor’s – it is the word of someone who has tried both products and found yours favorable.
Example: Imagine you frequently lose deals to Cheaper Co., a company whose product is half the price of yours – and one-third the quality. At least once per quarter, a former Cheaper Co. customer calls you & says, “Yeah, the (insert problem & give examples). We wish we had gone with you guys in the first place; we are out (insert large $ amount), and we have (insert more problems). Next time your prospect is also considering Cheaper Co., tell them, “I understand Cheaper Co. is the budget-friendly choice, and I think it’s wise you evaluate their company. But remember (as you have experienced) we frequently hear about their quality issues. The product price is less but is ultimately more expensive because of it (insert problem).
This soundbite first praises the buyer’s decision to consider Cheaper Co. (an important step if you do not want them to get defensive) before raising a legitimate concern. Bring it home by offering to connect them with one of your customers who made the switch: “If you are interested in hearing more, I can introduce you to John Doe, who decided to use us after picking Cheaper Co. just six months earlier.” The vast majority of prospects will be persuaded by this and will not even require a reference.
- Set clear Ground Rules (Let us suppose…)
Prospects often want to talk discounts before they are ready to buy. But the salesperson who starts the discounting conversation too soon, often opens a can of worms. Whenever a prospect brings up discounting you should set clear Ground Rules (clear expectations) – such as:
Prospect: “I would like to talk about discounts. What can you give me?”
Salesperson: “Well, Prospect, if you and I can come up with a price that works for both of us on this phone call, I’d be happy to send over a purchase order today.”
At this point, the prospect usually backs off:
Prospect: “Oh. Well … I do not think that would work right now.”
Salesperson: “Understood. Well know that I am open to the conversation, and the moment you are ready to buy, we can talk discounts.” Remember a pricing discussion happens late in the game – not early.
By saying this, you make it clear you are not going to negotiate unless the buyer is ready to close right then and there. This prevents you from discounting twice with different stakeholders and ensures you only discount when a buyer is 100% ready to buy. You have the highest priced product or service for a reason – you are worth it. Step one is you believing that. Step two is asking the right questions and setting the proper expectations so that your prospect believes it. Nothing new here.
