When to Provide Pricing to Buyers
Sales Training Article: When to Provide Pricing to Buyers
By John Holland, Chief Content Officer, CustomerCentric Selling® – The Sales Training Company
Salespeople understand that providing price very early in buying cycles may disqualify many buyers. My preference is to provide pricing after sellers have developed buyer needs into a solution. During this need development, sellers should have created potential value so that buyers will have a sense for potential areas of payback. Without value any price is likely to be perceived as being too high.
In trying to defer pricing discussions sellers should be advised to focus on buyer needs in order to avoid mentioning products prematurely. Once products are mentioned, an almost universal knee jerk response is buyers then asking: How much does your product cost? Premature pricing discussions are often an indicator that buyers are at lower levels within organizations. Executives are seldom interested in pricing unless or until they understand there is some potential value.
When asked for pricing early in sales calls, my suggestion is to make one attempt to defer that discussion by responding with something like: We’re early on in our discussions and I hesitate to just throw out figures. Could we defer discussing estimated pricing until I better understand your requirements? In most cases this approach will make sense and buyers will allow a seller time to better understand their needs, begin to identify potential areas of value and be able to make a more accurate estimate of costs.
If a buyer insists on getting a price, my advice used to be offering to suggest a range from $X to $Y. The downside of doing so is that in my experience buyers almost invariably remember the lower price. For that reason I’ve found a better alternative is to provide a “not to exceed” number that a seller feels will be higher than what will be quoted later. If the buyer feels that number is too high, one of the core concepts of Customer Centric Selling® is likely to be in play: Bad news early is good news. Buyers may disqualify themselves based upon the figure provided.
There are other times when sellers defer providing pricing until they issue proposals. I’m not a proponent of taking this approach because after need development is done properly, providing estimated or actual pricing is a key qualifier. It doesn’t make sense to spend a great deal of time with buyers while making them wait until a quote or proposal is generated.
It is interesting to note the focus that both buyers and sellers place on price. Interestingly when surveys are done to uncover the importance of different variables on buying decisions, price is seldom in the top 5. I think both parties would be better served to focus more on value and payback rather than price.