Jean, one of my coaching clients, has always been confounded when asked this question — “How much does it cost?” It seems that these are always the first words to come out of the prospect’s mouth. Jean sells computerized milling machines and lathes. She’s been in the business for years, but because of the slowdown in the economy – especially in the manufacturing sector – her sales are down dramatically.
It seems that the only things her customers and prospects are interested in is PRICE. They want to know how much does a milling machine cost? When asked this question Jean always feels challenged, intimidated and flustered. She’s never been able to come up with a good response to the ‘What’s it cost?’ question.
So she pulls out her rate card and tells the prospect the prices of the different machines she has available. From that moment on, the meeting goes down hill. The balance of the conversation focuses on the price of each machine. There is little or no discussion about what the machine does, or why it is needed.
The prospect jots down some notes, asks a few questions, usually says her prices are too high — looking for a bargain — and then ends the conversation by saying he’ll think about it and call her if he’s interested.
Jean — thinking she’s got a prospect — enters the person’s name, address and contact information into her database and schedules a follow-up call for a week or two into the future.
When she calls – more often than not — she gets voice mail because her prospect isn’t available. He’s in a meeting, on the phone, or away from the office. Sound familiar?
She leaves a voice mail message saying, “Hi John, this is Jean. Was just following up on our recent conversation about the milling machine and was wondering if you want to buy it? Please call me back.”
But the phone never rings. John doesn’t return Jean’s call. Joan is persistent. She calls again and again until she finally reaches John. He usually responds — always in a very friendly tone of voice — in one of two ways: “I appreciate your very diligent follow up, but found your prices were too high so I bought the machine from someone else.” or “We’re still thinking about milling machines and are talking with several dealers – including yourself – but we’ve not made any decisions. Why don’t you call me in another month.”
Jean has now fallen into the insidious follow up trap. Because she wants the sale — and believes she’s got a viable prospect — she calls again and again and again. But nothing ever happens. She doesn’t make a sale. Days turn into weeks, weeks turn into months. Nothing happens. Joan’s despondent and depressed because there’s no money in the bank.
Out of desperation she called me.
We tackled the pricing issue first. As I explained, “You don’t want to discuss price until the very end of your discussion/conversation. Once you begin talking about price, the subject of value, quality, service — and why they need to make a purchase in the first place — are shoved aside.”
I suggested that Jean say this — with a hearty chuckle and a great deal of sarcasm — when asked the question of price: “IS PRICE THE ONLY ISSUE?”
And then sit quietly until the prospect answers. If the prospect doesn’t respond, you repeat the question: “IS PRICE THE ONLY THING YOU’RE CONCERNED ABOUT?”
Then continue – with dripping sarcasm:
What about delivery? Is that important to you? I’ll be happy to send it to you within the next three to six months.
How about quality? Most of our customers like it to arrive in one piece. But do you care if it comes in two or three pieces? Would you like to specify big pieces or little pieces?
Have you given any thought to a warranty or guarantee. Our warranty is good until it leaves the factory. We used to give 30, 60, and 90 day warranties, but found them to be too expensive. If you do have any problems, you can always call our service department. We’re known within the industry to have the smallest support staff and longest wait times.”
Let’s not forget about payment terms.
We expect payment in advance.
And because I consider you to be an important and valued client, you can have my direct — recently disconnected — phone number.
Before you complete this list, both of you will probable break up in laughter because the simple question of ‘What Does It Cost?’ is so silly.
You can then say: “I don’t know what it costs, but can I ask you a few questions?” Your prospect will say yes, and you’ve diffused the whole issue.
As you ask your prospect questions, you want to discover the nature, depth and scope of their problems. In Jean’s case she wants to know such things as:
* Why do they need a new milling machine?
* What will they be making with it?
* What kinds of machines do they have presently?
* Why can’t it be done with their present machines?
* When would they like to have it delivered?
* What will happen if they don’t have a new machine by that date?
* What is the person’s position/title within the company?
* How do they go about making decisions to purchase new equipment?
* What criteria will they use to select the machine they’re going to buy?
Notice that none of these questions can be answered with a Yes or No answer. These questions encourage conversation and based upon the answers Jean gets she asks more questions as she drills down deeper into the prospect’s situation.
The key to dealing with the ‘How Much Does It Cost?’ question is to refuse to discuss price until you discover why the prospect needs the product or service you sell. But finding a need is only the first step in the process. You must discover the financial impact or economic consequences of that need. You must get them to put a dollar value on their problem. It must be their numbers, not your numbers. (Sorry, but industry averages, or statistics, don’t count.)
I love it when I find people with million-dollar problems, because my $100,000 solution no longer looks that expensive. Once you know why someone needs to buy your product or service – and you know the dollar value of their problem – you can then discuss price.
Joan started using this technique and her business has picked up dramatically. She’s no longer wasting her valuable time following up on people who’ve no interest in buying a machine from her. If she’s unable to get the answers to her questions, or the answers don’t sound reasonable or logical to her, it’s a big tip-off that she has a poor prospect. She may or may not quote a price, and when she does, she just tells the person to call her if he’s interested. She doesn’t waste her time following up with him again.
Instead, she gets on the phone, and continues looking for prospects.
”’Reprinted with permission from Jeffrey Mayer’s Succeeding In Business Newsletter. (Copyright, 2003, Jeffrey J. Mayer, Succeeding In Business, Inc.) To subscribe to Jeff’s free newsletter, visit:”’ http://www.SucceedingInBusiness.com