Imagine you arrive at the school reception of a highly recommended, shiny new private school for a school tour and the first thing you are presented with is a schedule of school fees detailing amounts due, payment terms and additional costs.
Now imagine you are met at reception and given a tour of the incredible facilities; the modern classrooms, the acoustically optimised music studios, the food-tech lab, healthy dining options and amazing sports fields and halls. You see happy children from a diverse cultural background and all the school staff smile as they pass you. The ambience is perfect. At the end of the tour, you are given a schedule of school fees detailing amounts due, payment terms and additional costs.In which scenario are you most likely to sign up?
The answer I hope is obvious. If we are trying to sell something, the chances of our target buying is much higher if we have built desire for our product or service first. In sales theory, we say that “a price out of place kills the sale”. There is a right time to introduce price and a wrong time.
This can pose a challenge when a client insists on knowing the price upfront. The problem with disclosing the price before you have built enough buying desire is that the price then becomes the focus in the client’s mind. Everything you say after disclosing the price too early is then weighed up against the price rather than accepted based on its merits.
A few weeks ago, I was contacted by a startup looking for leadership training. The company had never invested in training before, had no idea of the costs and had no allocated budget. When the client asked me the cost of such training, I replied that this was like asking how much a car costs. There are many different types of car with different features and price tags, and the one you buy depends on the budget you have.
In this scenario, rather than risk scaring the client with the price, I would prefer to understand their needs first and assess how seriously they are taking the training (which means allocated budget) before investing time to prepare and present options.
As a general approach, when pushed on price by a client, a good first response is “we will get to the price, first I need to understand what you need so that I can make sure I’m quoting you the correct price”. Only when you know what you are quoting for can you do so accurately – this is a good way to delay releasing pricing information while aligning yourself with the clients’ best interests.
Once you have sufficient information to disclose price and providing you have presented your case positioning your offer so that buying desire has been created, don’t be shy to ask your price and stick to it. If you’ve built your case, demonstrated value and are within a sensible touching distance of your competition, you should be able to command a premium and minimise price resistance.
Every product type, every service offering has its premium priced offerings. Why should you not be one of them?!
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