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A Little Mistake That Could Cost You A Fortune

Written by: Laura Posey

Article Overview: There you are, across the table from a prospect. It’s been a very good meeting so far and he seems to like you, your company and your product. You’ve asked some insightful questions and he’s given you frank answers. In response to his answers you’ve laid out an attractive solution to his problem and he seems interested. After you finish speaking, the prospect pauses a moment and then asks you the magic question. “So,” he says, “How much does the solution you’re proposing cost?”

A Little Mistake That Could Cost You A Fortune

There you are, across the table from a prospect. It’s been a very good meeting so far and he seems to like you, your company and your product. You’ve asked some insightful questions and he’s given you frank answers. In response to his answers you’ve laid out an attractive solution to his problem and he seems interested. After you finish speaking, the prospect pauses a moment and then asks you the magic question. “So,” he says, “How much does the solution you’re proposing cost?”

What do you say? Do you swallow hard and croak out a number, hoping he doesn’t hit the roof? Or do you sit up straight, look the prospect square in the eye and confidently give him an even higher number?

Discussing price with prospects can be one of the hardest things for salespeople to do. As a result, it is an area that dramatically limits their personal income potential. The ability to sell high margin and often high priced products separates the top notch salespeople from the rest of the pack. There are very few extraordinarily rich salespeople who rely on high volume, low margin selling.

The number one reason salespeople don’t sell high priced products is fear. The larger the sale, the harder it is for them to maintain their self confidence and project certainty. If they can’t hold the line and be sure in their price quoting, the big fish will get away.

Let me share a personal example with you. Years ago when I sold insurance I could sell auto and homeowners policies in my sleep. I was so good at it that I often sold 50 a week. The average price of the policies was $400. However, when it came time to sell life insurance, where average policies were $5000, my closing ratio was much lower. To make matters worse, I was usually selling the life insurance to my existing customers, whereas the auto insurance sales were from cold calls! What was the difference?

The difference was my personal perspective. At that time in my career, if someone had asked me to spend $400 of my own money on a purchase I wouldn’t have batted an eye. But if they asked for $5000 I would have balked, because that was a lot of money to me. I didn’t have that kind of money lying around, so I couldn’t imagine that other people might.

The mistake was seeing my client’s problems through my eyes instead of theirs. Have you ever thought to yourself, “Wow, my product is expensive?” If so, you’ve been seeing it through your eyes rather than your client’s. When you do that you are applying your perspective to their problem. If you aren’t in their position, don’t use your view to determine the value to them.

Here is another example to illustrate. A consulting friend of mine recently told me that her average contract is over $500,000. My eyes jumped out of my head and I asked her who paid that kind of money for consulting? Her answer was simply people who have $10 million problems. Her typical client is a large corporation that has major hiring and turnover problems. By the time she is done asking them questions about the true bottom line cost of their hiring issues, her fee seems like a bargain.

My friend understands her value to the client. Value is simply what they get divided by what you charge. In my friend’s case, the value to the client was 10,000,000/500,000 or a value of 20. Any value over “one” means the client is getting more than they are paying for. It turns a cost into an investment. It also means you can charge higher fees for your product than you are now.

When you discover the secret of understanding value from your client’s perspective, you will begin to realize your true potential in sales. You’ll graduate to larger sales, higher margins and bigger commissions. You’ll enter the realm of the six-figure salesperson. The fact is, when you master the art of value you’ll soar into the rarified space of the million dollar salesperson and write your own ticket to success.

Give it shot this month. Before giving anyone a price for your product or service, ask them questions to determine the economic benefits of buying from you. If the benefits are high enough, your price will seem very reasonable and the sale will close itself.

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Article Tags: marketing, motivation, sales, sales tips, small business



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