The Price Is Wrong: Why Talking About Price Can Hurt You and Your Customer
There are few ways to kill an opportunity as fast as talking about price too early in a sales conversation. Talking about price also has varying degrees of risk, depending on how the opportunity or conversation was created. We’ll talk about this later, but first, let’s discuss why the price conversation usually only ever hurts you.
Is the problem worth solving—is it even the right problem to solve?
The price someone is willing to pay for a solution depends ONLY on the problem they have, the impact of the problem, and the value of your solution. Nothing else matters. When you automatically provide price you’ve created an impossible situation to manipulate the problem—and to be clear, I don’t mean manipulate in a negative way. When the customer approaches you with a problem, they already know the impact of that specific problem and what it costs them to operate with it. If you give in and provide price, if the price is higher than their perceived problem cost, you’ve lost.
Customer problems are role specific—you need to find the systemic impact
Usually when a customer approaches you, that person is trying to solve a role-specific problem. Think of this role-based problem as the final twig on a branch. It’s possible they may be aware of the branch, but awareness does not usually extend too far. You need to take the time to understand how the whole tree is impacted by problems on the twig and branch levels. Why? Because a singular problem is usually not worth solving unless you’re selling a bandaid. You need to find the deeper pains and problems. By doing so, the cost of the cascading problems grows, making the price of your product more attractive and easier to defend—that also means less discounting! You need to perform an appropriate discovery!
Proactive vs. Reactive
Discussing price too early is always a concern, whether you were approached by a potential customer—reactive—or you’ve proactively worked with a lead to nurture them and solve problems. Price too early in a reactive conversation is almost always a killer to the opportunity. Any idea why?
If you’ve been approached by a potential customer, it;’s highly likely they already know their problem and have actually already started to discuss it with another potential partner. My friend, you’re not the first horse in the race. We’ll discuss this in a future article, but be aware that you should absolutely avoid discussing price upfront. In proactive conversations there is still substantial risk associated with discussing price.
Slow down to speed up you sales
Jill Konrath once said, “Slow down to speed up your sales.” These are great words of wisdom, especially in the context of the price conversation. Price is considered one of the final steps in the negotiation stage of opportunity management. This is about the customer and it should be your primary focus to slow them down. Otherwise, they risk missing an opportunity to solve a problem that might actually be bigger than they know, or might not even be worth solving. By slowing down you’ll either create a much stronger partnership and message, or avoid the heartache and bad press of being hasty and selling without value.