Re-framing Pricing Conversations
Salespeople run into many common challenges and a difficult one to artfully overcome is the pricing conversation. With so much data at Buyers’ fingertips, they have become sophisticated at negotiating and framing things in a way that puts them at an advantage, particularly around price. Many salespeople are uncomfortable talking about money. Additionally, they may or may not have done an effective job of asking questions during the discovery process. Lacking that foundation and level of comfort, they likely have not built a solid case for why a prospect should make an investment in your product or service. Consequently, when discount requests are made or they receive pushback on price, the typical salesperson will continue the conversation by offering discounts or other concessions when faced with a buyer who says, "You know what, I'm talking to other people, and they're not this expensive."
Do you know your organization’s price re-framing conversation? Talk with your sales managers and understand how they currently handle these conversations and how they teach salespeople to handle this common objection. Every salesperson should be able to quickly re-frame whatever pricing objection or concern comes their way. For example, when a Buyer says, "We're going with the lowest price so give us your best bid." This is a pretty common statement from purchasing agents, right?
Have your sales managers practice price re-framing conversations with salespeople until they are second nature.
Your sales leaders need to coach your salespeople to re-frame that issue and say, for instance, "You know, I understand, and that's usually one of the top handful of criteria. However, in our experience, going with the lowest price often brings the greatest risk. Tell me about what controls you've put in place to handle that risk."
Amazingly, this type of response can stop the pricing pressure from a Buyer. They will possibly not understand the question and ask for your information or, even if they do have valid responses, the conversation has been re-framed to something other than price. When faced with this, most Buyers will illustrate that price is NOT the primary criteria for purchase. A discount request has been changed from, "Hey, low price is our number one criteria," to “Risks? Wait a second. What risks? Tell me about them."
There are all sorts of ways to introduce a seed of doubt in the Buyer's mind around the risks they may be assuming by going with a less than premium product. Another way to re-frame the conversation is to put price in the context of the complete lifecycle of the purchase. Often, people are applying short-term criteria to what is ultimately a longer-term investment. Leverage the longevity of your product or service to illustrate the true cost over a period of time.
When they look at it and say, "Well, wait a second. I'm able to buy the same thing for 20% less. Why would I pay a premium?" They're thinking, "Right now, I have to pay 20% more for your product. I'm going to go with the less expensive product." When you re-frame that over the lifecycle of the product, you say, "Well, this product is going to last and benefit you for 20 years. That 20% incremental difference seems like a lot now, but when you consider the overall cost of ownership, it's a small price to pay for a much better product."
So whatever product or service you sell, as CEO, it's important that you make sure your sales managers are well-versed in coaching their team through those pricing conversations because their salespeople run into it every single day.
If you want to see your salespeople improve their conversations around pricing, reach out to us at Intelligent Conversations to see if you’re a good fit for our services!