Have you ever been at a dinner party, when one of the guests starts talking about a new car he just bought? He’ll go on and on about the specs – that insane horsepower, the V-8 engine, the convertible top-down, the high-tech dashboard, the 0-60 acceleration in 4 seconds. He’s pumped to show off his fancy new ride, and the rest of the guests are clamoring for the chance to take it for a spin.
That is, until you chime in and ask, “So, how much did you pay for it? Did you get a good deal?”
Cue the scratch on the record player. Congratulations! You’ve just single-handedly made the party awkward for everyone.
There is a weird social barrier when it comes to discussing pricing. Nobody wants to talk about it. Not the buyer, not the seller, and certainly not the other guests at the party. This translates to the B2B sales world too – conversations and prospects get uncomfortable when pricing comes up. Yet, pricing is also a critical and necessary part of any sales conversation.
So, how should you talk about the P-word with prospects?
Why nobody wants to talk about pricing
As mentioned above, there is a natural pall that typically sets over any conversation when money or finances get brought up. The disconnect can appear even wider and more uncomfortable when in a sales-customer relationship.
This is because pricing has a stigma of being something that can be easily deceived. Customers naturally think that they are always being overcharged for their purchases, while sellers might feel that buyers are hagglers who are always trying to cut corners and spend as little as possible, at the expense of the business. This push-and-pull, with both sides eyeing each other suspiciously, breeds an environment of distrust.
But it doesn’t have to!
How to have the pricing conversation
Early pricing questions – “Do you have budget for this?” “Are you comfortable with our pricing” – are as important a part of the qualification process as questions about use cases or process. However, this doesn’t mean you should introduce pricing early in the conversation. As soon as you introduce budget, you’re always inviting negotiation, which can get contentious, especially if the right people are not in the room. At that point, the conversation will just descend into an unproductive back-and-forth about points. Serious conversations about pricing should never be broached until the business need has been fully discussed.
Think about what happens when you bring your car in to the garage. You would never say, “My car is broken, I need you to fix it – how much will this cost me?” A mechanic who gives you a price quote right then is probably ripping you off, preying on your desperation and ignorance.
A real mechanic, on the other hand, would lead you through a diagnostic of your problems before quoting you a price. They can’t tell you how much it will cost to fix your car if they don’t even know what the specific problems are with it. Any price they might quote before performing a full diagnostic will be inaccurate, and probably too high. Price has to be matched to pain, and pain solved.
Instead of playing the part of the sketchy mechanic, sales reps should:
Make sure that the company’s website has full pricing information. Full transparency should always be the goal, and is always going to be well-received by customers. Requiring leads to call you for a quote makes it seem like you have something to hide – you don’t want to start your relationship off on that foot.
Always have the business conversation first. Talk about what kind of pains the prospect has, and how your product can address those specific pains. Here is when sales reps want to have consultative conversations, not pushy, aggressive or intimidating ones. Don’t spare any details in laying out the business case for your product.
Prove ROI. When prospects ask about pricing, what they’re really saying is, “For what I would pay, what am I getting out of it?” That’s where proving your product’s return on investment can really pack a powerful punch and diffuse any pricing awkwardness before it sets in.
If you can’t prove any ROI – either through case studies or by running the prospect’s unit economics through your own ROI calculator – that $15k price tag is going to look pretty hefty. But what if your product can improve their company’s efficiency and save them $150,000 a year? Well, now paying $15,000 seems like a worthwhile deal doesn’t it? At the end of the day, pricing and ROI is all about context.
As long as pricing information is transparent and sales reps follow the pattern of talking about business needs, presenting the solution and then accommodating budget and cost – instead of talking about price before pain, as prospects would like to do – the pricing conversation doesn’t have to be awkward and uncomfortable. Accept that pricing is a necessary part of any sale and address it head-on. It’s time to remove the taboo from this topic.