Why People Challenge Price

by ActionCOACH David Beam

Customers want several things from their suppliers. Surveys of consumers have shown that most want timely service first, quality products and services second, and low price third. When asked in sales seminars what they think is most important to consumers, sales people have offered consistent feedback. They believe the consumer wants low price first, quality second, and good service last. There is a clear difference between what customers really want and what salespeople think they want.

Most consumers tell salespeople that what they want is low price, when what they really want is low cost. Think about it. Do you want the cheapest, or that which effectively solves your problem or fulfills your need or want? Customers want their problems solved. They realize they get what they pay for, and that the memory of poor quality lasts far longer than the immediate high of a low price deal.

People object to price when they feel that you are asking them to pay more than what they perceive the value to be. When most salespeople get price resistance, they simply lower the price. Usually it’s not a price issue, but one of low perceived value. So how can you raise perceived value? Through asking great questions and listening to discover what is causing your customer to be dissatisfied. Then you will be equipped to show them how your product or service will remove the pain and satisfy their need, and even exceed their expectation. This will ensure that price will be secondary.

An example of a good question you might ask is: What will it cost you if you wait and buy this later? What will happen if you don’t buy this? What if you try to save and get a poor cheap substitute? Another example more specific to our business would be: "What would one lost sale cost you in comparison to the fee for a sales training program?" “What would it mean to gain one great customer per salesperson this year based on better training?” The point is, we need to get people focused on -- the cost of not doing it or the cost of doing it wrong vs. the value from the investment they will make. (This assumes your product/service actually does save them money, time, effort, and provides value over time)

Real sales professionals focus on value, what the product or service does for the customer, and not price. They understand that, while price is an issue, it’s not the most important one. Price will always seem high when perceived value is low. Don’t lower prices, raise perceived value. Lowering price only makes your original price suspect and undermines your credibility.

Remember! Once you set a discount or concession precedent, you’ll live with it for years with that customer.