Know-How Exchange : Strategy

Carol is really smart when it comes to this stuff. I agree that the best course of action is to not play their game, insist on a chance to learn exactly what the client needs, and present your explanation of why your proposal makes the most sense for them.

My suggestion (above) presumes that you've already decided that you'd rather comply with their demand than risk being left out of the consideration set.

Well, in the case of emailing or mailing a proposal, we may not get a "your price is too high".

We may just not hear back from them at all. That's my concern.

either way, sames results-- no sale or you are back scrambling (vs controling the sale) trying to explain yourself-- n'est ce pas?

Telling someone "what's your price" upfront and other tactics mentioned above is a stall vs a real objection. Its like when someone says, "we already have a supplier" -- it gets them off the hook and an unexperienced sales person off the line.

Norton's last paragraph in his post says it all.

No-- you simply can't walk from every prospect who first knee jerk first question asks "what is your price". Pack up your tent? Or is this when sales meets order taking. Let the rubber meet the road.

They don't know value until you teach them. It has nothing to do with prospect's time. You are on equals. To you both, your time is valuable-- don't lose sight on this.

Dear Aaron,

I seem to have struck a nerve. Here are a few more thoughts:

If this prospect is INSISTING that you send over your pricing proposal via email - without a meeting, send them your price.

My gut says they'll say your price is too high. Or that your service package isn't what they're looking for. Or that they've found "better" service delivery somewhere else.

Or something along those lines. Few of these things might be true because this prospect may be shopping ONLY on price.

If this prospect is shopping on price ALONE, they may have little or no concept of value REGARDLESS of the price (yours or someone else's).

This is a problem because the road to "cheap" is littered with the wreaks of businesses that competed solely on price and who, as a result of undercutting their competitors, or because they drastically discounted their services to attract clients, went out of business.

When price is the ONLY factor between one producer, service delivery, or commodity and another, tactics take the reins and yell "Yah mule!" when the wagon really needs to be steered by strategy.

Strategy usually knows the value of value and is more often immune to price. Tactics usually knows only the short term fix and is often ignorant of the value of value. Sometimes, trying to educate tactically-minded shoppers of the benefits of value gets you nowhere. True, a little education is a dangerous thing. But there's nothing nearly so dangerous as an awful lot of ignorance.

Or of an unwillingness to learn.

Tactics usually lead to a price war because tactics often (but not always), often go hand in hand with price. "OK", says supplier 'A', "For the short term gain, we'll cut our prices. That'll pull in customers because we're cheaper than Joe Schmoe!"

Joe Schmoe sees this happen and cuts HIS price to undercut his rival to then pull in even more customers because people want things for cheap. Supplier 'A' then cuts HIS costs and suddenly, tactics lead to a price war. Prices fall. Customers want to know why things are SO cheap. What's wrong with the merchandise? Buyers become suspicious. Fewer people buy. Inventory sits and doesn't get paid for because costs can't be covered and the next thing you know, BOTH shops have big assed signs plastered across their front windows that say "GOING OUT OF BUSINESS!"

Gee. I wonder why? Might it have been because of their tactics?

Strategy looks not just farther down the road, but over the hill, and around the bend. Strategy learns from the mistakes of its forefathers. Strategy thinks "What might we gain by this action, or by putting this resource to work in this area? What might we lose by that action, or by following the herd?"

True, you can't teach people about the value you offer until you're given the chance to show them.

But by the sound of things, this prospect appears to be interested just in the figures, not in what those figures secure for them. It's THIS that steers my thinking when I suggest walking away.

Now of course, it's NOT good to walk away from EVERY prospect. But that's not what I suggested. I suggested walking away from THIS prospect.

True, this prospect may not know about value until they're taught about its relative merits. But surely prospects and clients ought to have SOME concept of the value they're investing in ... otherwise, why are they in business at all?

No, it's not the prospect's job to know every facet of value in every facet of their daily operation. But they ought to at least have some understanding.

I don't agree that the prospect here is viewing you (Aaron) as an equal. It seems to me that you may be being viewed as a service provider.

If that's what they want and if that's what you're happy to provide, send them your price. It's a tactic but it might pay off and they might sign on the dotted line and become an ideal client. But strategically, it might also be wiser to politely state your usual operating process. It might be wiser to outline your overall mission to offer value based services that reflect your price, even if this means you have to decline their invitation and leave this client for someone else.

I hope this helps.

Gary Bloomer
The Direct Response Marketing Guy™
Wilmington, DE, USA

Well I agree that there are some people who only care about price and those are probably not your customer.

Where I disagree with Gary is to assume that just because a customer asks that question up front that he is one of those people. It is such a common knee jerk response to a sales call. It is no reason to pack up your tent and move on.

My prospects are pretty sophisticated buyers. They aren't purchasing my product for the first time. But I am trained in one product and know my competitors better than they do. So I educate them. That is one of the values I add.

In the beginning of a business or any relationship we often don't start out on equal ground. You earn it by proving your value and the value of the relationship. Just cause you call your family? Come on....

I can only tell you I hear that question about price daily-- from again, sophisticated buyers. I am rarely lowest price. And I consistantly work them into understanding the value and close more than my fair share of projects.

BTW, I don't even send a piece of sales literature to a web lead without a conversation. That conversatioin starts to build the rapport. I tell them same thing different way "I don't know what to send you til you tell me about your project". So if I don't know what piece of marketing material to send without a conversation, how on earth would you know what price to quote.

I think it is quite possible that the person requesting the quote has no authority to buy anything.