Replace the prices with whatever you’re selling and the answer is still the same. Here’s what to do when your customer tells you they only have X for budget.
What do you do when your customer has a budget of only $2,000 – or they say they only have a budget of $2,000 – and your product sells for $2,500? What do you do? Do you drop the price $500 to match their budget and give them a discount? Most people would, right? Wrong. That’s the wrong answer for a number of reasons.
#1, if you drop the price to match their budget, all you’ve done is you’ve actually said, “You know what, my product really isn’t worth $2,500 to begin with. It’s only worth $2,000,” so maybe that comes across as unethical to begin with. Why would you charge me X and now drop it down to Y?
So many sales reps, they get so hung up on offering the lowest price to try to close that deal and they’re focused on the wrong thing. Instead of focusing on discount, focus on demonstrating the benefits of your product. What’s the value? Once you demonstrate why it’s worth $2,500, now you can start having a conversation about how to make it more affordable.
In fact, let’s challenge something. Maybe they say they only have $2,000, but it’s possible that you might be able to find other ways that they can afford that. Maybe they can take budget from another account, for example, and actually afford it once they see the value. Be creative. Find other options.
You want to go down that road instead and maybe offer them some payment options, some flexibility. Maybe instead of paying it all now, they can pay it in monthly instalments, or maybe half now half later. There are so many creative ways to go about this, but certainly, do not focus on discounts and lowest price. It’s not going to help you.
Focus on demonstrating value and that’s going to help you every step of the way.
- Tom Abbott is the author of 'The SOHO Solution' and 'Social Selling' and the creator of the online sales training platform SOCO Academy. Sales leaders engage Tom for his proven solutions to building high performance sales teams that exceed targets and for motivational keynotes that energise their audiences.