So today, let's go back to grade-school grammar class and consider the six most instructive words in the English language. Journalists use them every time they sit down to write their stories. Police use them to guide their investigations. Mothers use them -- or should use them -- before allowing their teenagers to hang out with friends.
SENSITIVE SUBJECT.Yes, I'm talking about the famous Five Ws + H: who, what, when, where, why, and how. Bear in mind that selling situations vary widely, so what follows isn't a hard-and-fast guide to every selling situation you're likely to encounter. Rather, think of it as an exercise intended to stimulate your thinking about the best time -- and the best ways -- to raise and address the touchy topic of price.
Now, let's tackle those invaluable words one at a time:
Who names the price? It's a standard principle in negotiating that the first person to mention price loses. However, if both parties adhere to this belief, there's an unbreakable standoff, all concerned feel stupid, and everyone's time is wasted. As the salesperson, you have the final say on price, so accept that there will be days when you will have to broach the topic. To make this easier, role-play a variety of scenarios with fellow members of your sales team, and keep on rehearsing the possibilities and permutations until you feel you can handle this step smoothly and with confidence.
What is the price? Every customer is different, but based on how you read your customer, you will need to decide if you should start the price conversation high, and risk losing the client's interest, or begin low, and forsake all hope of a heftier margin. The advantage to starting high is simple: It will give you more room to come down -- and when you do, your client is likely to sign the purchase order in good spirits, since he or she will have won a larger concession.
When to name the price? Relax, there is no absolutely perfect time. If you quote the price too soon in the selling process, and your customers think it's too high, there may be no further discussion of value and negotiations could end then and there. On the other hand, if you quote the price too late and it turns out that your customers can't afford it, you've wasted a lot of time.
One way to minimize the risk is to mention a ballpark figure early in the selling process. If you're rolling along, pitching a solution you know costs around $1 million and the customer is thinking more along the lines of $100,000, you've got a problem. Worse, you've also eroded some of the potential client's good will, making it less likely that you will be able to close a deal for some other, perhaps less expensive product, at some point in the future.
There's more: If, when asked for the price early on, you stall rather than provide a firm answer, the client may well assume what you are offering is overpriced. On the other hand, if your customer never asks the price, he or she may well be wasting your time. Perhaps the real goal is simply to look busy. Who knows, who cares? There are better days to spend the day than wasting it with people who can't manage their time as well as you do yours.
Ultimately, the salesperson controls when to name the price. Just don't allow yourself to be rushed -- you will probably regret it.
Where to name the price? Early in my selling career, I heard some great sales advice: "Sell it where they can buy it." Imagine if you sold cars. A customer might walk around a vehicle, test drive it, then ask for details about cost and financing. It would be tempting for a novice salesperson to discuss the financials while lingering over the car, but a seasoned veteran knows to walk the customer back to a sales office, where the business really gets done.
This concept also applies to selling over the telephone, via e-mail and on Web sites. If the customer can't complete a purchase for one reason or another, don't plow ahead regardless and try to close then and there. Rather, sell the prospect on setting up an appointment for another visit, when, with any luck, there will be a better chance of striking a deal.
Why to name the price? Seasoned salespeople know they need three attributes to close a sale -- a customer's need, the urgency to satisfy it, and the money to make that desire come true. With just the first two, your customer has nothing more than a wish -- and since you're not a Fairy Godmother, it's not your job to grant it. Qualifying clients on the size of their budgets and their ability to pay is the difference between failure and success. Selling is trading the client's money for your product. If customers don't have the money, they don't want a deal. What they want is charity.
How to name the price? I like to laugh as I say, "For you, today, it's a mere $10,680" or whatever the price may be. My light-heartedness helps counterbalance the heaviness of the topic. It's a delicate moment because, now that you have shown all the wonderful benefits of your product -- the gains the customer will enjoy after signing on the dotted line -- desires must be balanced against dollars and cents. After all, no customer wants that awful feeling of wanting something that simply can't be squeezed into the available budget.
While we're on the topic, many salespeople are tempted to compare their wares to those of their competitors. If you do, or if your customer insists, remember to always take the high ground. Don't trash talk other vendors, because your words are apt to boomerang back and whack you right between the eyes. Instead of trashing the opposition, steer the conversation to the features, functions, and benefits that make your outfit's offering superior to all others.
Remember, there's no need to be uncomfortable. Your customers are charged with making sure that every dollar they spend generates a dollar-plus worth of profits for their company. If you show them how to do that, it's time to close the sale. Happy selling! Michelle Nichols is a sales speaker, trainer, and consultant based in Houston, Tex. She welcomes your questions and comments. You can visit her Web site at www.verysavvyselling.biz, where her new CD, 72 Ways to Overcome the Price Objection is available. She can be contacted at Michelle.email@example.com