Clients don’t say no to you because of the price. It is never the price. It is never the cost. It is always the value (or lack thereof). So how does your business deal with your Value vs Price? Do you lower your price? Or Increase your value?
People get so caught up on the price that they miss the real message in the rejection.
What that client is really saying is that they can’t see the value in what you are offering at that price level. For example, a bottle of water is good value (translate as cheap) at $1, it is fair value at $2 or $3, but at $6 – $8 it is now expensive. In other words the client (in this case me) see the value up until about $3 but beyond that I am struggling to understand what makes that bottle of water worth $8. I can’t see the value therefore I will not buy it and my response will be, “boy that is expensive” or “what a rip off”.
Now if that was the last bottle of water and I was in the desert then I would probably see the value at $8 or if it gave me some magical powers then maybe.
People pay enormous amounts of money for absurd things (e.g a $20,000 handbag – my view) and at the same time struggle to pay small amounts of money for relatively important things (example is life insurance).
Why? It is not price or cost – it is value. They either can’t (insurance) or can (handbag) see value in the good or service.
So when you or your staff come back and say “they thought we were too expensive” or “the price we charge is too high” – you need to remind them (or yourself) it is probably that you have not fully communicated the value versus the price and as a result the prospect did not buy.
Now the caveat to this is if you are talking to the wrong target market. I see the value in a Ferrari but can’t afford to buy one. I am therefore not the target market for the Ferrari sales person, regardless of how much drool and how many buying signals I am displaying. If the client standing in front of you can’t afford your product or service then regardless of seeing the value you will not make the sale. However if the client can afford your product or service and still says that it is too expensive – make sure you hear what they are really saying which is, “I can’t see or don’t understand the value”.
Value vs Price: Agree or disagree?