How many times do you offer a brilliant solution in a brilliant presentation only to hear your listener say, “Your price is too high,” “We don’t have that in the budget,” “I can get it elsewhere for less,” or a variation on that theme? Objections to price generally come down to a lack of perceived value received for the dollars spent. How do you change that perception? You can drown buyers with the flood of benefits they would be getting or, a better strategy, you can ask very specific cost questions.
I was reminded of this last week while coaching a sales executive (let’s call her Lauren) who happens to sell conference sponsorships to corporations in the financial services field. Her typical response to price concerns is to (enthusiastically) point out that this is the industry conference of the year, that one hundred and fifty of the sponsor’s 
target accounts will attend; that the event is being held in a beautiful resort location; that key industry speakers will be featured; and that a number of additional smaller benefits will be included as well; that it is, in fact, a terrific event.
To her mind, the conference sponsorship is worth twice the quoted fee!
And therein lies the problem. It isn’t about what Lauren, our seller, sees in her mind that counts. It’s about what the buyer sees in his mind that makes the difference between a go or no go. Lauren would do far better to request permission to ask a few questions and then ask:
- What is your client acquisition process?
- How long does it take to get a new client?
- How long will that client typically stay with you?
- What is the dollar/revenue/fee value of your typical client?
- How many people do you have out in the field selling and marketing for new business?
- How many of your current clients will refer others to you?
Suppose the prospect’s answers reveal that
- The process is a time consuming one of identifying target accounts, initial contact, several meetings, and then an agreement or contract to work together, all of which can take from six months to a year.
- The typical client stays with the company for three years at an average value of $100,000 a year, so that each client is worth about $300,000.
- Every third client recommends a new client to the firm.
- There are twenty field salespeople covering the U.S.
Do the Math Given this new information, it becomes fairly easy for Lauren to paint a different picture in the client’s mind that he can get excited about and use to justify the investment. Her response might be, “Let’s look at that $35,000 investment. At this event, in two days vs. several months of prospecting and meeting, you and your people will have the opportunity to begin relationships with one hundred of your best prospects in a relaxed setting, which will make it much easier to call on these people later. That alone will accelerate your selling cycle. Between the planned golf and tennis and cocktails, there is time to have these people really get to know you and your colleagues. Think about it: If you make even one sale from this event, given the average $300,000 value of a single client to you–and that is without the referral value–you will have paid for participation several times over and it is far more likely that you will develop more than one new piece of business from the meeting. Moreover, as the exclusive company in your industry niche on our panel, you have a chance to showcase your firm’s best thinking and enjoy an edge over your competitors who will not be there. Why would you want to miss out on that?”
Value vs. Cost is in the eye of the beholder. It is easier to paint a picture of value for a buyer when you understand his cost of client acquisition.
Anne Miller
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