In addition to connecting price to value, to help you justify your pricing there are a few more guidelines to follow when it comes to positioning pricing: don’t just send it, consider how you position it.
Discuss, Don’t Just Send
Unless you don’t have a choice, don’t send pricing until you have discussed it with the client. Many salespeople conclude sales meetings by offering to send pricing without having first discussed it. Whether it is because 1) they want to avoid conflict, 2) they are not comfortable discussing pricing, or 3) they don’t understand the power of the dialogue in connecting price to value and setting the client’s expectation level, many salespeople opt to send pricing and thereby lose the chance to position value.
Link Price and Value
The best way to protect your price is to link price with value. Once you have fully identified needs and clearly positioned your solution to the client’s needs, is the time to position pricing tied to the value the client will gain. Even if the client doesn’t ask about price, you should initiate the pricing discussion non-defensively, for example, ask about budget or suggest going over the pricing terms. If you must work up the price, use a follow-up phone call to go over pricing vs. simply sending it.
Be Confident
As you discuss price, be confident. Many salespeople lose their footing when price comes up. If necessary, practice positioning price in front of a mirror. If you appear to lack confidence, you will invite price resistance. Of course don’t be arrogant, but confidently position your price or terms wrapped in benefits tailored to the client’s needs. Link your price or terms to the value the customer gains to create value justification. After you confidently state your price/terms, be silent – the first to speak is the first to fold. When you include pricing in the proposal, do so in a way that clearly shows all the client is getting.
Position the Pricing
When you present pricing in a proposal or send pricing information as a follow-up to your pricing discussion, think about how you format it. Salespeople have lost deals because their pricing was presented in a confusing way or a way that made them seem more expensive. For example, they may include bundled options within the price, which may make them appear uncompetitive because they are including options competitors have not included. Or they may unbundle when bundling in the particular situation would best show savings. Or they may provide totals that include options that the client may not choose to buy.
Test:
Your colleague asks you, “At the end of the meeting, after I discussed needs and I positioned our value, price didn’t come up and because the client was enthusiastic I didn’t bring up pricing. I’m going to include it in my follow-up letter. The client will be making a decision in the next week.” What advice would you give in most situations?
- Call the client to thank him/her for the meeting and non-defensively review the pricing before sending.
- Because it was such a good meeting, send the pricing information in the letter, not to unnecessarily draw attention to it.
- Give the client an opportunity to think about the solution, send the letter without pricing, and call the client toward the end of the week.
- Because the client did not bring it up, assume price won’t be an obstacle.
Response:
Best Choice A. Since it wasn’t discussed in the meeting, a confident, tailored, concise phone conversation is better than sending pricing because you can more fully position value, get feedback, and offset concerns and differentiate your solution. Position the conversation as a benefit to the client, “To understand your budget ”
Not Best Choice: B, C, D. B – In general it is better to discuss pricing than send it. C – You don’t know enough about the timing to select this option. If, for example, the budget is way off and the decision time frame is very short, it may be too late to adjust your solution (i.e. change the price/change the deal). Ideally bring/discuss, not send, pricing if you have a chance, especially for all major deals. D – Don’t assume anything. Validate, validate, validate.
Linda Richardson: President and CEO of Richardson, training consultants to corporations, banks, and investment banks globally. Richardson has 110 professionals, 15 regional offices in the United States, and presence in London, Australia, Singapore, Latin America, and Asia. Clients of Richardson include KPMG, Federal Express, General Mills, Tiffany & Co., Dell Computer, JP Morgan Chase & Co., Citibank, Chubb Group of Insurance Companies, and Kinko’s. Visit http://www.Richardson.com.
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