About this video
How do you deal with price objections? In this lesson, author and sales expert, Phil M Jones explains that value is only a perception away.
Video length: 6:00
Grant Leboff: For anybody in sales and you talk to them, you'll always hear at some point a whole thing about price objections, I mean, they're too expensive or I can get it cheaper somewhere else. What's your whole take on this whole idea of price and dealing with price objections?
Phil M Jones: Man, this is a huge subject. I've spent days talking about this. I think the first thing that we need to get our head around is; the value is only a perception anyway. There is not a sum of money that is too much money for anything. The world proves that with the luxury marketplace. We must first understand what something is… why is it expensive or why is somebody judging something as expensive? The thing that makes something expensive is what it's being compared to. When you can understand the comparison then you've got something to build value against. That's an important point.
We also must understand in the sales and marketing professions where we present the price. Often, people make a big mistake here. I mean, have you ever spent more money on something than you said you would?
Grant Leboff: Sure.
Phil M Jones: Yeah? We all do that, right? If we lead with the price, we could dismiss all the people that said they'll never spend more than that if you didn't make them want it first. Today's day and age, very few people buy what they need. They buy what they want. Which means, we have to make them want it before we can show them how to get it. Kind of simple. We're talking value and price. If I had the word value written in my right hand and price written in my left hand and the price came before the value, the price looks bigger to you, right? But then if I have the word value kind of coming out in front and we get that out there first then value looks bigger than price. That means, we need to get people to want it first.
Biggest mistake I see people make is still sending proposals in the post or sending them by email. It's stupid, flat right stupid, right? Because you're then following up with phone call typically or a second meeting to chase this proposal which again is a stupid concept. We send the proposal through and that conversation typically goes something like this. You pick up the phone after multiple attempts saying, "Did you get the proposal I sent?" They say, "Yeah, I got it." They then say, "I've not gotten around to reading it properly yet," which is possibly not the whole truth because they probably read one part of it which is the what?
Grant Leboff: The price.
Phil M Jones: They're at the price, right? But you spend hours or weeks or days putting together this beautiful proposal document yet still the consumer jumps straight to the price without building any of the value. Understand your job is to package that price in the right kind of way so the consumer can see the value. Let's look at it this way, we got a glass on the table here. It's the only prop I could reach for. If that is chucked on the table at a car boot sale, how much is it?
Now, I take the exact same glass and put it in a line with a dozen of them surrounding on it in a department store like Debenhams, right? How much is the glass now? I take the exact same glass, I put it in a box, box is made of mahogany and the mahogany box is velvet lined. It sits in a glass cabinet. Glass cabinet is spotlit. Glass cabinets sits in a department store, it's not Debenhams, it’s in Knightsbridge, it’s in London, it’s called Harrods right? And to get to the glass, I need to speak to a member of the staff and he's wearing a black tuxedo, white gloves and his name is Pierre. Now, how much is the glass?
In the whole same part of the process, we're talking about the same thing, right? It's still a glass. In business, there are thousands of people doing what seems to be the same thing. The thing isn't the thing that's valuable, it's the stuff that surrounds the thing with the value it brings. Get real focused in understand what the extras are that you bring in and around the thing that you say you're good at, that's where you can start to build a price and then demonstrate as value when you can talk eloquently about the things that make you different, not the things that makes you the same.
Grant Leboff: I want to ask you about that, if you understand that concept between value and price and what makes someone valuable, how does a business start to understand where the real value proposition is. The reason I ask you that is I find so many businesses that don't really truly understand. They sell stuff and they're making money but they don't really seem to understand where the true value of what they do is. How would you advice a business to start to really get under the skin of that and make it work for them?
Phil M Jones: Listening again. Got to understand what your customers truly like about you. There are some simple questions I think people should put into process. I try to make this as easy possible. Now, when a customer doesn't choose you, good practice is to ask that customer and say, "Why is it that you didn't choose us?" You get some information. Same is true with the customers that do choose you. We forget to ask those people the same set of questions. The questions run like this; what three things do you like best about working with us, and if there's one thing you could change, what would the one thing be.
You ask that set of questions periodically to everybody you do business with, what you'll learn will be incredible. Forget the long winded questionnaire, detailed analysis, just those two questions, and you'll start to see what your true value is. You'll never take that thing away. You can then build on it. Did this with a hearing care practice out in Iowa in the US, that set of questions. They found out the thing that their customers love best is they answered the phone on weekends. They changed all of their advertising proposition away from we've got the best technology, we've got the nicest people, our customer service. They moved it towards we pick up the phone till the weekends. Their inquiry level went 300% higher because they found out the simple thing that their existing customers love and they made that the headline.
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