When Your Price Really Is Too High

When I get asked by sales professionals all around the county how they can overcome the “Your Price is Too High” objection, my response is you must first understand that in their operating reality, your prospect is right. Your price is too high. For now.

when-your-price-really-is-too-high[Editor’s note: Though this post talks about sales, it does get into issues marketers find vexing. It also provides solutions marketers may be able to use.]

When I get asked by sales professionals all around the county how they can overcome the “Your Price is Too High” objection, my response is you must first understand that in their operating reality, your prospect is right. Your price is too high. For now.

Your price is too high because you have not done one or both of the following:

  1. You have not uncovered a good and compelling reason for them to buy from you. Put simply, they have not recognized a need.
  2. You have a value problem. You have not established what your product or service will provide to them financially, operationally or personally and what problem you are solving for them.

You have choices when you hear that objection.

You can ask “Where do I need to be with my price in order to close this deal?” which many salespeople resort to. Selling on price, however, is always a losing proposition. You might win a deal, but you are left defenseless because someone can always come along with a cheaper price and take your client away. The other option is that you can take the time to uncover needs and sell value.

The most effective strategy against the price objection is preventing it in the first place.

What’s the Problem?

Let’s assume we have a great handle on all the features and benefits of our product/service. We also have a target set of clients that have been predetermined to likely need what we are selling. We might have even been trained on why they need what we sell. This combination can often be deadly — especially to the seasoned sales rep. We think we know the problem our client has (because we’ve seen it before) and so we charge in to solve it! Even if we are right, we set ourselves up for failure. Why? Because we didn’t take the time to ask about their situation, really listen to them and create something that will be meaningful to them personally. You must show that you care and that you want more than anything else to understand their operating reality and see if you can possibly make it better. If you do this, they will acknowledge a need for what you are selling. The only way to accomplish this is to use effective questioning skills and active listening skills.

So What?

True sales professionals concentrate on first understanding the client’s current challenges and identifying how your product or service will solve their problem. Think of it like this, no one buys the product or service you sell, they buy what it will do for them. 

WIIFM. What’s In It For Me. That is what they buy. Picture your prospect thinking to themselves with every sentence you utter about your product or service. “So What? So What does that mean to ME? What’s In It for ME?” If you can take the problem you uncovered and communicate the value you can deliver in those terms, you are well on your way.

Value = Benefits – Cost

Value has a price tag. And it varies depending on the buyer – not the product/service. Long before the price is ever mentioned, the sales professional must uncover what their prospect perceives as valuable and what the consequences of not buying are worth. With that in mind, they can position it so that the buyer feels as though the price was a great deal for them, regardless of the price. ROI! The equation Value = Benefits – Cost shows that we put a price on cost AND we put a price on the benefits. If in our mind, the benefits are greater, than there is value in making a purchase.

Let’s use buying a highly commoditized item as an example. A cotton, short-sleeved, T-shirt. These types of T-shirts can range in price from $5 to $100 or more. Things matter to buyers; color, sheen, logos, convenience of purchase, weight, etc. And, they often also appeal to emotions such as a souvenir of a great vacation, your favorite band, college, a show of super-fan for a favorite sports team. Personally, I wouldn’t pay much for a Mets T-shirt, but would spend plenty more on a Cubs T-shirt and even more still if I bought it at a game, where I had a great time watching them beat the Mets. But, that’s just me.

You can be prepared in advance to uncover the problem, position what you are selling in terms of what it means to them and in terms of their perception of value, AND help them justify their purchase when they state your price is too high. Or you can lower your price. It’s your choice.

 

Don’t Make Me Think — Or Choose: Marketing From a Position of Strength

You think you’re being helpful by offering your site visitors and email subscribers a lot of choices. You’re not. You’re being counter-productive. And you may even come across as a little desperate. The counter-productivity is a result of our natural inclination to shut down when confronted with too many options to process.

Position of StrengthYou think you’re being helpful by offering your site visitors and email subscribers a lot of choices. You’re not. You’re being counter-productive. And you may even come across as a little desperate.

The counter-productivity is a result of our natural inclination to shut down when confronted with too many options to process. You’ve probably heard of this referred to as analysis paralysis or the paradox of choice.

These phenomena are very real, and offering too many choices, even if they are presented in a visually compelling fashion, leads a higher percentage of your audience to opt for “Door No. 3” — doing nothing.

Offering fewer choice requires that you do the research and planning work before crafting your offer so that you know what will resonate with each of your audience segments. Once you’ve done the work to establish your audience’s needs, there’s no risk in offering a manageable number of options. You already know what they want.

Reducing that risk has the added benefit of eliminating even a whiff of the desperation that comes with trying to please everyone all the time.

Appealing a little to everyone isn’t the goal. The goal is to appeal strongly to those best suited to benefit from your product or service. This allows you to market from a position of strength. You’ve built a great offer around a product you know to be of value to your target audience. Now you know your marketing is much more helpful than intrusive. (Assuming you’re backing it up with great content.)

Don’t dilute your message with extraneous choices or choices designed to appeal to other segments. Those belong elsewhere, on separate landing pages or in emails targeted specifically to those segments. (You are segmenting your email list, right?)

The action you want your audience to take should be immediately clear, apparent, and transparent. This isn’t the Penn & Teller show. You’re not going to trick anyone into taking meaningful action.  You can only convince them that what you’re offering is worth their time.

That isn’t to say that you want to offer your audience no choice. Frequently, a choice of options is appropriate for even a tightly segmented audience. But that choice should be limited to just a few options. As in two or three — tops.

And your CTAs should not be equally weighted. As I mentioned above, there should be a clear objective, with everything in the email or landing page pointing toward that desired action. The secondary action(s) should be just that — secondary. They should be an acknowledgement that our research and data and segmentation might not be perfect and that some members of our audience might be just slightly off the target you’ve created. That’s OK. Those secondary choices also serve to re-affirm the choice the bigger part of your bell curve is making.

5 Positioning Ideas When Leading With Price

What works best? Selling product benefits, then revealing the price? Or revealing the price, followed by selling benefits? There are rarely absolute answers, and statistically valid A/B testing in a direct marketing environment will give you the answer that works for your situation. Still, findings of a new study suggest five ways for direct marketers to reveal price

What works best? Selling product benefits, then revealing the price? Or revealing the price, followed by selling benefits? There are rarely absolute answers, and statistically valid A/B testing in a direct marketing environment will give you the answer that works for your situation. Still, findings of a new study suggest five ways for direct marketers to reveal price.

Neuroscientists and professors from Harvard Business School and Stanford University conducted a study to see if considering price first changed the way the brain coded the value of the product.

The focus on the research was on brain activity when the participant saw the price and product presented together. They were most interested in the area in the brain that deals with estimating decision value (the medial prefrontal cortex), and the area of the brain that’s been called the pleasure center and whose activity is correlated with whether a product is viscerally desirable. This pleasure center is called the nucleus accumbens.

Fundamentally, the research indicates there are differences in how a person codes information, based on whether the product has a greater emotional attachment, or whether the product was more practical.

They found that brain activity did vary in the sequence of product versus price first. A conclusion of the report is that when the product came first, the decision question seemed to be one of “Do I like it?” and when the price came first, the question seemed to be “Is it worth it?” Three other points made in the research suggest that showing price first can make a difference:

  • The order of price or product presentation doesn’t matter when the product is desirable and easily understood and consumed (e.g., movies, clothes, electronics), and fulfill an emotional need. If the product is affordable in this instance, then it’s an easy decision no matter how price was presented.
  • When a product is on sale or bargain-priced, showing price first can positively influence the sale.
  • When the product is practical or useful (more than emotional) showing price first prompted participants to be significantly more likely to purchase a product.

“The question isn’t whether the price makes a product seem better, it’s whether a product is worth its price.” said Uma R. Karmarkar, one of the research author. “Putting the price first just tightens the link between the benefit you get from the price and the benefit you get from the product itself.”

For direct marketing, copywriting formulas often dictate that the price comes toward the end of a sales message, after the product has been presented—particularly in letters and longer-form copy. This study suggests an A/B test of revealing price first is in order.

If you are going to test revealing price first, here are five positioning ideas:

  1. When a product is on sale, prominently show the price. Use dollars, not percentages. Percentages aren’t easily calculated in the mind (or worse, they are miscalculated in the mind and you risk losing a sale).
  2. Incrementally break down the price. Show it as the cost per day, cost per use, or some other practical way to reveal increments of the price.
  3. Compare the price to an everyday item. One of my most successful direct mail packages included a letter with a headline that said, “For about the cost of a cup of coffee a day, you can have …”
  4. Compare to your competition. If you have a price advantage, show it. If you don’t, then compare at a different level that includes longer product life, more convenience, or other benefits.
  5. Position the price presentation as a cost of not buying now. In other words, show how the price could increase in the future, or the loss that can happen by waiting. This positioning also creates urgency.

It’s important to acknowledge is that the research didn’t study emotion-based long-copy with storytelling and unique selling positioning of the product. Using emotion, story and a strong USP before revealing price in a direct marketing environment may be more effective to sell your product. Every situation is different. The only way to conclusively know if revealing price first will generate a higher response than presenting the sales message first is to A/B test.

How to Convince Trade Show Contacts to Engage and Buy on LinkedIn

You’re attending conferences, coming back to the office and requesting prospects connect with you via LinkedIn. You’re getting connections, but are you getting any action? Are you generating leads and nurturing them to transact? You will, and more often, if you follow this simple template:

You’re attending conferences, coming back to the office and requesting prospects connect with you via LinkedIn. You’re getting connections, but are you getting any action? Are you generating leads and nurturing them to transact? You will, and more often, if you follow this simple template:

  1. Remove all focus on you—dramatically.
  2. State a benefit to connecting they cannot resist.
  3. Nurture the lead to fruition using provocative tips.

For example, one of my students used this message to approach prospects … and failed.

Hi, Juile,

Nice meeting you at _______ [conference]. If it’s ok, I’d like to invite you to become a member of my professional network of prospective buyers on LinkedInmade up of high-level executives worldwide. Check them out. I don’t sell to them, but they do buy from me. It’s up to you.

Sincerely,
Charles

Let’s examine the mistakes made and an approach that increased his connection ratio and sparked discussions about what he sells.

Remove All Focus on You
It sounds obvious. But are you doing it—and doing it dramatically? If you’re like most sellers using LinkedIn, you’re letting what you need (leads) get in the way of what your prospect needs to act on (a problem or goal).

The solution is to put what your buyers want to hear up front in the first sentence. Clobber them with it. Tell them how you can remedy their pains or increase their success rates.

“Nice meeting you at the conference,” is an effective way to set context. However, asking someone to become a member of your professional network:

  • is not distinct—it sounds like one of countless other requests
  • is not clearly beneficial to the recipient

Using descriptors like “high-level” and “worldwide” is noise. It’s not important to the prospect. Period. The general rule is to remove all descriptors (adjectives and adverbs). If you do, you’ll sound bold and create an attraction.

Keep the focus on the other side.

State the Benefit in Dramatic Terms
Set the bar high. You don’t want a connection or discussion. You want the prospect to act—to see you as relevant to a pain or goal and irresistible. You want them to act, now.

Specifically, let’s get your prospect to take action—connect and, in near or far term, identify as a warm lead. However, be careful: don’t let your need cloud your ability to focus on the prospects’ point of view.

In my example with Charles, he uses an occasional newsletter to nurture leads. He aims it at his LinkedIn contacts tagged as “long-term leads.” These are buyers who are qualified to buy, but have not yet identified themselves as needy.

Charles’ newsletter is sparking discussions—helping him nurture and identify buyers. People are reading the newsletter and hitting reply, reacting to what he says. With this valuable tool in mind, we can improve Charles’ success rate when approaching conference leads to join his list.

For example:

Hi, Julie. Nice meeting you at _______ (conference). Connecting on LinkedIn will benefit both of us. For example, I send out a newsletter to a privileged group of colleagues on occasion. It provides useful tips to my most valuable relationships … in a way that often sparks reactions. This keeps us in touch … so we increase chances of helping each other whenever possible. What do you think? Thanks for considering.

Charles

Notice how confident and useful Charles sounds, right up-front. He sounds certain: this is a good idea. Plus he states why by focusing on what the other side wants—useful tips that creates benefits.

Also notice the use of the word privileged and how it implies exclusive benefit to the prospect.

Bottom line: If Charles has an asset (a newsletter that sparks reactions with potential buyers) he should leverage it. Also, instead of positioning his LinkedIn network as being valuable (sounding like 98% of LinkedIn users) he positions what his prospects want as what he has for them.

All his future buyer need do is act.

Your Turn
Can what you sell solve a problem? Can it give customers a life-altering experience or bring them closer to reaching a goal?

Let them know you’ve got a sample of it waiting for them.

All they need to do is respond.

Politely tease them a little. Dangle a carrot. When you’re writing the goal is to help them think, “I wonder what, exactly, he/she means by that?”

In the end, it’s easy to end up feeling like a zombie—dumping contacts into LinkedIn, hoping prospects will connect. After that? This is where the strategy tends to fall apart. Don’t let it happen to you.

Remember to avoid:

  • losing focus on benefits you bring to the other side (state them up-front!)
  • asking prospects to do what they likely don’t want to do or have time to do … or see immediate benefit in (explore your LinkedIn connections / network)
  • using descriptors like “high level executives worldwide” (don’t try to convince prospects of something they may already understand—your value!)

Good luck and let me know how this works for you!