“Excuse me,” came the man’s voice from behind Nancy, “could you answer a few questions for me?”
Nancy turned to find Bill looking somewhat perplexed at all of the computers on display. “Don’t know,” she responded, “depends on the questions.”
“Ah, well, I guess you’re right there.”
“I guess you’ve owned one and you are . . .” allowing her voice to trail off on purpose, knowing that she would wait forever to get a response.
A moment or two later, Bill blurted out, “Actually I’ve never owned one, but everyone at work told me I need that model over there.” Bill gestured to the most expensive model in the store.
“Understand,” responded Nancy, “suppose no one at work had suggested anything . . . which one do you think you’d need?”
“Well, based on the magazines I’ve read, this one here,” pointing to a model at $2,000 less, “would be perfect. Besides I can also afford it.”
“This may sound like a strange question for me to be asking you . . .”
“Go ahead,” said Bill, “ask.”
“If you buy that one, the one at $2,500, what are you going to say to the people at work when they find out you didn’t take their recommendations?”
“Hmmm, actually I’ve been thinking about that ever since I read that magazine article that recommended this one. I figure that for right now, I don’t need all of the whiz bang, and if I do later on, this model can be upgraded.”
“Sounds like you don’t want to buy more than you need to get the job done.”
“That’s me. Look, this is the one I want. I’m going to buy it. What I’d like you to do is suggest a couple of CD-ROM titles that might be fun for kids.”
“Okay, but I’m a little confused . . . “ responded Nancy.
“If your budget limit is $2,500, you are going over the top now.”
“Oh,” said Bill with a smile, “I also have another $300 to spend on software. What do you suggest?”
Nancy is going to make a $2,800 sale very quickly with very little work on her part.
If the prospect has been living on a deserted island for the past 15 years, without any radio, TV, newspapers, or contact with the outside world, he may not have any idea what your product or service costs.
That person doesn’t exist. Everyone who walks through the door, calls on the phone, or requests a meeting with you has some idea what the price is. It may be too low or too high, but they do have a price in mind. Everyone—without exception.
Here’s why: The prospect finds himself in need of what you are selling. He starts looking around, asking friends, listening to ads on radio or TV, perhaps even reads a couple of magazines. Based on all of this, he begins deciding on what the price will be. Keep in mind, neither of you know the other exists at this point.
Only then does he go looking for you. You may cold call him, he may walk in, he may respond to a direct mail piece; how you learn of each other’s existence doesn’t matter.
What is most important for you to understand is that when you do meet, however that may be, he has already decided on what the price will be. Find out what his preconceived price is
No one is suggesting that the first thing you ask the prospect is “How much do you want to spend?” Most prospects, despite what they say, will think “As little as possible.” You are then setting yourself up for a session of objection, overcome, objection, overcome, etc. There are other more fruitful approaches.
For example, “What other models have you looked at?” If he has looked anywhere else, and tells you, you are beginning to find out his price.
As a follow up, “Since you have looked at other models, why didn’t you buy one of them?” Besides learning more about his price, you’ll also learn about what he feels are important features.
If the prospect shows any knowledge of your product, you respond,
"That’s interesting you know about that. How did you learn of it?”
Knowing your prospect’s price allows you to focus on his pain.
Every person who buys anything from you has already decided, before they have even met you, what it will cost. Find out if they are being realistic.