Recently, I was in the market for a product. Once the salesperson got me on the phone, this is what I heard: “Mr. Rhoads, this is the best product on the market, light years ahead of our competition. I can get it for you at a really good price right now. In fact, I can take 20 percent off the top.”
Here’s what went through my head as he spoke:
Salesperson: “Mr. Rhoads…”
My thoughts: I hate to be called Mr. Rhoads: It drives a wedge between us, making the salesperson seem alien.
Salesperson: “This is the best product on the market…”
My thoughts: Says who? Prove it. More important, I want the product that will work for ME. I will determine who has the best product. He’ll say it’s the best, but I can’t believe him: He’s the one selling it.
Salesperson: “Light years ahead of our competition…”
My thoughts: I didn’t know there was another company. I wonder who the competition is? I’ll trick him into telling me their names, then I’ll call them. If this guy feels compelled to mention the competition, he must be losing sales to them. There must be a reason.
Salesperson: “I can get you a really good price right now…”
My thoughts: I was willing to pay the price on the website, and he’s dropping it already. They must be overpriced. I’d better check the competition. Buying one right away from this company would obviously be a mistake.
Salesperson: “I can take 20 percent off the top.”
My thoughts: Something is really wrong here. If he starts with 20 percent, I can probably get 60 percent off, or more. Now that I know he can drop the price, I’ll keep saying no and see how far it comes down.
I called this guy’s competition without mentioning the first company. The competition’s salesperson immediately asked about my needs. She probed, asked questions, established value for her product, and finally got to pricing. When she stated the price, I gasped. (I was trained to do that, weren’t you?) She didn’t flinch or defend, so I asked, “Can you do better on the price?” I tried a couple more times in a couple different ways, but I ended up buying the product at full price. I was happy about the price from the beginning, but I always ask for a better price.
You probably have battle scars from tough clients who beat you up on price. It’s just plain stupid, however, to give in quickly or — heaven forbid — offer deals before establishing value and need. My friend Dave Gifford once told me, “Never, Ever Offer Price Before Value Is Established.” You should tattoo these words inside your eyelids.
Don’t assume your client knows about your competitors. Mentioning your competition only invites your customer to play you against the competition.
If you sell on price from the start, you’ve already lost the game. Word gets around. Get the rate. Be firm. Be willing to walk away. If your customer is haggling on price, 1) you’ve not established value, 2) you’ve failed to fulfill a need, or 3) they’re ready to buy and just fishing for a lower price.
Price is not the most important thing. It’s what’s going on in your customer’s head. Learn their thoughts; then watch your close rate skyrocket.
11/24/03 Radio Ink Magazine. By B.Eric Rhoads