Addressing The Price Question: Sell, Don't Defend

So what do you say when the first question a prospective customers asks is, “How much do you charge?” Pricing questions will eventually come up during the course of a purchasing transaction. If they are first on the list, however, this is a clear indication that the consumer has little idea of what you provide that’s different than their idea of the basic service provided by anyone in your type of business.

As a California business growth advisor, I’m consulting with companies in a state that saw more than its fair share of run-away consumer purchasing. Now, most business owners struggle to get past the dreaded questions about their prices and why they aren’t cheaper than the company that the consumer called before them.

Pricing questions are an opportunity to differentiate your business. A full 70% of consumers make purchasing decisions based on the value they perceive vs. the price of the purchase they are considering. These value decisions don’t change over time. The only thing that changes is the availability of money. If you receive a call and the first question is about your price, its likely the consumer doesn’t really know about you or what you do that’s different.

If you are experiencing an increase in ‘Price Calls’, here are some things to do to overcome them:

1. Review all your marketing materials. What message are you sending? Are you leading with price? Do you base your entire ad on discounts or ‘lowest rates around’? Does your website convey a quality service or a price service? Do you have particular ways of delivering your service that your existing customers like, but is not mentioned anywhere in your marketing? If so, change your message.

2. Check your top 3 competitors marketing message. What are they promoting? Are their services in line with yours or are they focused on other services? Are there any areas that they are missing that could provide an opportunity for you? Find a way to differentiate your business from the competition in an area that you know is important to your customers.

3. Have a script for the folks who answer the phone. When someone asks about price before they understand how you do what you do, simply mention that you can provide accurate quotes once you understand what they need. Then, immediately ask them if you could ask a few questions. The questions you ask should strive to understand exactly what they want and what’s important to them so you can sell them on the benefits of your service. If they persist in wanting to know what your price is before knowing any more, give them a range to work with. Don’t defend your prices. This usually has little effect on their willingness to pay the price you ask. Don’t volunteer to drop your price right out of the gate. This only adds suspicion to your entire business. If you feel the need to match a competitor, do so only after you’ve had a chance to understand exactly what they want and what their other price was based on.

4. Be prepared to let the business go. This is extremely hard for businesses that need the sales to stay in business. The danger of accepting low prices from consumers who want to negotiate your prices down is doing work that may cost you. If this goings on long enough, your businesses reputation will be hooked to the low price service you can’t afford to continue with.

The bottom line is; if you’re getting too many people who want your product or service cheap, they are either not your ideal client or there’s something in your advertising that leads them to believe your service is not worth what your prices suggest. In either case, continuing without getting help from a business growth advisor to fix the problem could be the express lane to going out of business.

Successful businesses build their brand images on distinctive, unique or quality approaches, not price. Effective sales and marketing strategies that focus on unique positioning, identifying the right customers and creating compelling messages are the tools that will reduce the ‘Price questions’ and make you more confident about holding the line on price concessions.

Steve Smith is the OneCoach Business Partner for Saddleback Valley-CA, where he now coaches and mentors small-business owners and entrepreneurs, helping them get the answers they need to grow the businesses they want.