Last fall I traveled to Eastern Europe with a group of executives. While visiting Heroes’ Square in Budapest, a street vendor approached me and asked if I’d buy a fur hat. The conversation went like this:
Street Vendor: You can buy my hat for 40 Euros.
Shari: Can I try it on? (She hands it to me) It doesn’t fit. It’s too small. Do you have another hat?
Street Vendor: No. It’s a nice hat. It’s made from beaver. Okay, 30 Euro?
Shari: It still doesn’t fit. I won’t wear it.
Street Vendor: Okay… 20 Euro plus another of the same hat.
Watch the video below.
Maybe there was a language barrier and the saleswoman didn’t understand what I said. Or maybe these were her last two hats, and she just wanted to unload them and go home. The point is: Don’t drop the price with the first sign of resistance. Instead, uncover your prospect’s true objection and recommend a solution that fits their needs.
Many salespeople think “If it’s just cheap enough, they’ll buy it.” I’ve got news for you: if you make anything cheap enough, someone will buy it (Except for a USB pet rock. Yes, there really is one. It’s listed in an article in Interesting Engineering as one of the 10 most useless products ever invented).
Why are we so quick to drop the price? Many salespeople underestimate what their product can do for their customer. As my colleague, Adam Robertson, says, they don’t see the value or they don’t have the money. In other words, they’re selling from their own pocket.
And,
Find out if price really is the prospect’s only and final objection. Top performers follow these three rules when closing:
#1 – They uncover the prospect’s real objection rather than simply responding to an excuse.
#2 – They add value rather than simply dropping price.
#3 – If they do change the price, they’re sure to modify the original terms. That is, they take a benefit off the table to accommodate the change in price.
Why would I buy a hat that doesn’t fit, even if it is cheaper? My ears were cold. I needed a hat that would cover them. Could I have torn the two hats apart and made one hat that actually fit? Not how I wanted to spend my vacation.
Your prospects won’t buy a hat, a vacation, a car, software, or financial services if it doesn’t fit either. As Warren Buffet once said, “Price is what you pay, value is what you get.”