You don’t need to be defensive on price—we already made this point. Very few people buy the product or service that has the absolute lowest price. What they buy is value, seeking the biggest bang for their buck. This includes evaluating their solution alternatives and making the best decision.
The challenge for salespeople is getting prospects to compare products in an equitable way. Selling professional services is a good example. Why would anyone want to pay in excess of a hundred dollars per hour for a good accountant, when they could have their taxes done at the local H&R Block office for $69.95? Likewise, why would it make sense to pay two or three times as much for an experienced software analyst when you can hire a bench technician from a local computer outlet for cheap?
It’s especially difficult to quantify benefits with intangibles. From the prospect’s point of view, is it better to pay less money for a less valuable resource, or to pay more for the appropriate level of expertise? Since customers cannot actually see the intangible (in this case, a service) before it’s delivered, they often struggle with making the best decision. That’s why, when my QBS clients ask me to help their salespeople justify the premiums they charge for a higher level of expertise, I suggest they should negotiate like a dentist. Here’s a cute little parable that illustrates my point.
One day, a dentist is examining a new patient in the chair.
“Hmmm,” the dentist says after reviewing the x-rays.
“What’s wrong?” asks the patient, sensing the dentist’s concern.
“It looks like we need to pull a bum tooth,” the dentist answers.
“Oh no!” the patient grimaces. “How much will that cost?”
“About a hundred dollars,” the dentist responds.
“How bad will it hurt?” the patient moaned.
“Not bad. It only takes a minute,” the dentist replies.
“Wait a second. You’re going to charge me a hundred bucks for something that only takes a minute?” the patient challenges.
“Well…how long would you like it to take?” asks the dentist.
To justify the value of your product or service, sometimes it’s necessary to change the prospect’s perspective. Would you rather pay a little more to have a tooth pulled quickly and painlessly, or some other alternative that is less expensive, but comes with a much higher personal cost?