Sticker shock, or client objection over price, is something all salespeople deal with at some point in their careers. And, most entrepreneurs are their company’s salespeople in their business’ infancy. It is a feeling that the prospect wants to spend less money on the product or service, even though it will be well worth it in the long run. How do you deal with this issue? There’s a few ways to influence your prospective client using the following techniques:
1. Use value-based selling to justify the price
Value-based selling is where you’re trying to convince the client that your product is worth a lot more than it actually costs. This method focuses on highlighting how much more value your product will give them in comparison to other similar products and services in the market.
In real estate it might mean highlighting what your home offers (newer construction, eco-friendly appliances, great school district, etc.); if you work in tech, it’s highlighting your what problem your product solves (there’s a reason Loom echoes, “you just saved everyone a meeting” when you finish a recording); if you work in dentistry, it can be simply forecasting the cost of a problem if you don’t resolve it sooner.
2. Show the client it’s a good deal
To use this approach, you must be intimately familiar with your service’s features especially compared to competitors. One of the pitfalls many entrepreneurs make when developing a new product or service is when they’re asked about competitors. Many say, “we don’t really have a competitor because no one does what we do.” This is patently false. Netflix has openly declared “sleep” their competitor. They’ve also stated the video game Fortnite is their competitor because both these things vie for your time and attention. You have competitors. It doesn’t matter if they sell a similar product or not. And this is where business acumen comes into play. You need to view your product on a macro scale. What problem does it solve?
It’d be one thing if Netflix told investors they keep a catalogue of entertainment for families. It’s another if Netflix is seeking investors in home security because Netflix keeps safe at home; restauranteurs, because Netflix hours of entertainment prompts more food delivery service; environmentalists, because if people are at home, not driving their car and contributing to fossil fuels and watching documentaries on the the world, then it’s win for both.
3. Use their emotions to influence them
You see this with most news media outlets and, when done right, this can make the sale. Sticker shock can be attributed to fear which is a solid motivator. However, anger and sadness are equally strong motivators and you can provoke both with verified customer reviews. Anger at the prospect of what might happen if they miss out and sadness on if they miss out. Don’t be precious about your reputation, spread it and encourage happy customers to say as much.
4. Find out why the client thinks it’s too expensive
The only reason this isn’t higher on the list is because for many people, there’s no price that would be “just right.” Too low and it’s dubious. Identifying the reason why they think that your product is too expensive will help you provide them with an effective response that addresses their concerns. Typically, what leads a prospective client to you is they recognize they have a need and almost always recognize it’s more affordable to pay for it. Case in point: what’s the best tool for a bathroom remodel? A checkbook.
That said, often why someone thinks it’s too expensive is because they don’t know what it should cost. Tell them to ask other companies and if you can’t match it to go with them. Assuming your rates are competitive or there’s a reason yours are above average, you should have no problem meeting this challenge.
5. Do the math
It’s no secret that every company does this. Huddleston Tax CPAs does it. For instance, we offer CFO services to small business owners. If you do the math, this is an outsourced service that makes more sense than hiring someone in house. If you’re a company of 300+, then it probably makes sense to have one or two financial officers on payroll, but if you’re a small to medium sized company it doesn’t make any sense to be paying benefits, insurance, and PTO for someone to do quarterly projects.
Add up the costs of the products or services they’re using (or what the cost of the alternative is) and then show them that paying for your product/service will be more affordable over a period of time. This can go a long way in helping prospects recognize the value you offer.