It’s the dreaded price question, and this is only your first meeting. The buyer is asking for price information before the needs assessment, before the solution has been crafted, and before value has been established.
So, what’s a seller to do? Use these sales negotiation skills…if you want to torpedo your chances of success.
You could dodge the topic.
Many sales training programs position the price question dodge as an imperative, advising sellers to never, ever, ever give a price until value has been established. Most courses that focus on sales negotiation skills emphatically hammer on this point. This school of thought says to ignore price questions completely until you are ready to talk about “the investment required.” And, in most sales processes, price and negotiation come at the end. That’s when sellers would prefer to talk about price. But it’s not when buyers want to talk about price. Take a look at HubSpot’s research that shows the gap between what buyers and sellers want to talk about in the first meeting.
You could give a clever response.
There are plenty to choose from in articles, books and training programs. Some try to add a little levity, like, “At this point, we should be able to work something out for under one million dollars.” Some response are more pointed like, “Would you ask your new doctor to give you a price quote on surgery before the initial exam begins?”
You could explain the delay.
This seems to be the most common response. Rather than giving a price, sellers say something like this: “There are many options, and I need to understand your needs before I can give you an accurate quote.”
You could offer a price range.
The range will be based on average deal size or will have a broad spread between low and high. The point of this response is to furnish information without coming in so high that the prospect tunes out.
OR, Try These Sales Negotiation Skills
You could simply answer the question.
Right away. In a straight-forward, no-more-mystery kind of way. You could give an actual price quote even though value hasn’t been established and despite the fact that the steps in your sales process haven’t been completed. This is what buyers are asking you to do.
Why it makes sense to answer the price question right away.
Buyers are frustrated. They are becoming increasingly impatient and intolerant when it comes to price deflection tactics.
Working with Santa Clara University, we conducted a Qualtrics Panel Study with 530 verified B2B buyers. After finding that they viewed 30 specific behaviors as highly favorable for sellers to adapt, we asked them to rate the importance of these 30 behaviors. The #1 choice was this behavior:
“The seller fully answers my questions and provides information that is relevant, timely and useful.”
The open response comments from buyers left no room for doubt. Buyers do not like seller stall tactics. They want an answer — an actual dollar figure — when they ask about price.
When price questions are not immediately answered, buyers get suspicious. They wonder why there isn’t price transparency, and they assume they will (eventually) be quoted an inflated price.
Suspicious buyers are guarded buyers. The more you withhold, the more they withhold. As you proceed with your needs analysis, you’re not getting all the information you need to accurately quote price. Why not? Because the buyer is responding in kind. You dodged their question; now they're dodging your questions. They don't want to equip you with information you can use to inflate the price.
In addition to being counterproductive, causing mistrust, and erecting a barrier between the buyer and seller, not answering the price question can be a big waste of your time. Here are three situations where giving price and moving on could save you time:
- What if this is a price shopper? If price is truly going to be prohibitive, why not extract yourself from this conversation ASAP?
- What if this isn’t the decision maker? More and more, buyers are doing their own research and pre-qualifying. Make no mistake — it’s not the decision maker who’s doing that research! The person appointed to gather information and run the initial comparisons is quite likely the person you’re talking to.
- There are multiple decision makers in most B2B purchases. If you’re talking to one person in this initial meeting, you’re barely scratching the surface of needs and values. Your preliminary assessment will, at best, enable you to give a preliminary price quote. So why not save time and provide a preliminary price quote right at the start?
Sellers Who Resist Early Quotes
Most sellers resist early price quotes for one of two reasons.
First, they say, there’s a lot the buyer doesn’t know yet. They wouldn’t want the price to be the only thing the buyer reacted to. The problem with this rationale is twofold:
- Buyers see prices on merchandise every day. It is more common to see price tags on merchandise or on websites than not to see a price. Clearly, people don’t react to price alone. If they did, no brand name products, luxury items or premium options would ever be sold.
- Instead of buyers reacting negatively to a price, they’re reacting negatively to sellers who dodge the price question. By not answering their question in a relevant, timely and useful manner, you’re giving them a reason to go elsewhere.
The second reason sellers are opposed to answering the price inquiry is that they aren’t fully confident in their pricing and value. Of course, these sellers wouldn’t like talking about price at any point in the sales process. But, for them, putting off the inevitable for as long as possible feels better.
No matter what your reasons are for preferring to wait, consider the reasons not to wait. Then try some A/B testing of your own to see if answering the price question directly might actually work better than what you’ve been doing.
How to Answer the Price Question Right Away, Meet Demands & Build Value
Differentiation is the real key to advancing the sale. Since most sellers delay responding to the price question, you’ll immediately differentiate yourself by giving the direct response the buyer is requesting.
You can also build value even as you answer the price question. First, there’s value in being responsive. It suggests you are tuned in to the buyer’s needs and unashamed of your prices. Being responsive shows you are transparent and trustworthy. What’s more, the law of reciprocity will kick in. Because you were forthcoming with information, the buyer will be, too. You’ll get better quality information faster and can use what you learn to build even more value for this buyer.
To answer the price question right away while also building value, try one of these strategic responses. Be sure your tone is matter-of-fact and direct, conveying confidence and transparency.
- Price + Question: The preliminary price is $X and that includes (define your features). What criteria, other than price, will you be using to make your final decision?
- Price + Benefit: The preliminary price is $X for the (defined) option. What this means to you is that you’ll have (defined benefit). How important is this benefit to you?
- Price + Personalization: The preliminary price is $X for our (defined) package. I’m thinking this is the right package for you because you (explanation). Let me ask you some additional questions to confirm that I’m on the right track.
- Price + Urgency: The preliminary price is $X and we can honor this special offer for 48 hours. I’m mentioning this because it sounds like price is important to you. What will the impact of this cost saving opportunity be on your decision-making process?
- Price + Budget Check: The preliminary price is $X. Tell me how this sounds in terms of your budget and the prices you’ve heard from others.
Notice that price comes first in each of these options. The buyer asked for price, and you immediately responded with price. Then, rather than debating the price, you’ve steered the conversation back to something related to value.
Notice, too, that there’s no hesitation, no beating around the bush, no apology and no “maybe” language in these responses. Your confidence in the way you state your prices is every bit as important as the price itself.
Finally, be sure to notice the word “preliminary.” Unless your prices are absolutely fixed, be sure to use this word to signal that there may be some movement in price. Don’t make up a number or low-ball the quote. Using “preliminary” is not license to play fast and loose with the true pricing.
Keep This in Mind
As you respond to the price question, keep this in mind: No one asks about price unless they are interested in purchasing. Consider price questions to be buying signals rather than potential objections. Your prospect is interested and has gotten to the stage in their own buying process where they need pricing information. Let that knowledge guide your responses and accelerate you and the buyer to the close.