Entrepreneurs are routinely advised to avoid competing on price because it's not sustainable. That's great in theory, but how do you apply it in practice? What do you say to a customer who believes that your prices are too high, especially when they have lower cost alternatives to justify their position?
There are plenty of conventional sales tactics for resolving price objections. For example, you might:
- Probe whether money is a real constraint or not.
- Clarify whether they are concerned about the price or the payment terms.
- Circle back to their purchase motives and requirements.
- Highlight the cost of not buying from you.
- Renegotiate the scope of your offering to fit their budget.
- Reframe the price by deconstructing the lump sum into a cash flow.
- Discuss other purchases they've made that weren't based purely on price.
Any of these might work, but the root challenge is getting someone to stop thinking about price so that you can have a conversation about value. And that's not easy, because intrusive thoughts self-perpetuate (which is why it's almost impossible to stop thinking about pink elephants after being asked to imagine one).
Wouldn't it be great if you didn't have to go through those price conversations in the first place? Ideally, your customers would already be thinking about service, quality, or whatever it is that separates you from everyone else when they make contact. So what can you do to tilt those odds in your favour?
Manage the background.
Two researchers conducted a fascinating experiment to investigate the impact of different website designs for an online furniture store. They discovered that including fluffy clouds on the background prompted visitors to think about comfort and choose more expensive products accordingly. Conversely, images of money prompted people to focus on price and choose less expensive products.
Psychologists commonly refer to this phenomenon as "priming". When we are exposed to an event (even something as innocuous as a picture of a cloud), we automatically reference associated concepts and memories. This is why Red Bull sponsors extreme sports, why low-calorie products are often packaged in light colours, and why Voss has such a distinctive bottle design.
The conversations that you have with your customers will ultimately determine the fate of your business. Think carefully about the events that precede them.