I read an article today about how to handle price objections. In this article the author advises salespeople to avoid talking about the price of the product or service they are selling until after they have “demonstrated the value” of their product or service. Unfortunately there is a fundamental problem with that advice: You cannot demonstrate value without talking about price.
Value Doesn’t Exist in a Vacuum
When you are talking to a prospect about the value of your product what is the measure of that value? Value is not an abstract concept. It has to be quantifiable to have meaning for your prospect. And no matter what unit of measure you use for value (cost savings, improved productivity, improved throughput, reduced customer support costs, reduced customer churn, improved customer satisfaction and so on) in the end it must always be reduced to a monetary basis to have any meaning for your prospect or customer.
Value is defined as “…the worth of something in terms of the amount of other things for which it can be exchanged…” This means that you can express the value of your product or service, for example, in cost savings, improved productivity, or reduced customer churn but it will have no meaning for your prospect or customer unless they can measure the worth of that value in terms of the money they must pay to receive it (otherwise known as an ROI.)
You can tell your prospect that “our customers have experienced an average 19% improvement in revenues in the first 3 years of using our product” but the first thing the customer is going to do is calculate what a 19% improvement in revenues would be worth to them in terms of the investment they must make to realize that value. But how can they make that necessary calculation if you are withholding pricing information? They can’t.
Your job as a salesperson is first and foremost to provide your prospect with the information they need to make an informed purchase decision. The number one piece of information that your prospects want when they talk to you is pricing. Keep in mind that before they have ever talked with you, your prospects have spent time online to research your company, your products and services. When they do talk with you they already have the facts and features of your company and product offerings in hand. What they want to understand now is the value your products and services will provide them. This understanding cannot be reached without talking about price.
Value is the Core of Qualification
In fact, you really cannot talk value to your prospect without qualifying them. Refer back to the definition of value above. Value is the “worth of something” (the measurable benefits your prospect will receive from your product or service) expressed “in terms of the amount of other things for which it can be exchanged” (money.) Now, think about what prospect qualification really means. Qualifying a prospect means that you reach a tentative agreement with your prospect that the value they will receive from your product or service is worth a certain amount of money (i.e. investment) to them. It doesn’t mean that they are in love with your price but that they agree in principle that the value they will receive from you has a certain monetary value to them. If you can’t reach this agreement with your prospect you shouldn’t be investing additional sales time with them.
How can you demonstrate your value to your prospect without talking about price? You can’t. And you shouldn’t try. Value doesn’t exist in the absence of pricing information.