It never fails. You design a client a whiz-bang system that would make you drool, and they look at the price, and start in with "I don't think I need all that." A thought swiftly crosses your mind: "Since when are YOU qualified to make that judgment?!?"
So, they start to ask for something "less complicated."
In reality what they are saying is: "I don't like the price", but they don't want to say it. You know it. They know it. There are only two people in this elevator, and we both know where that flatulence smell is coming from.
So where do you go from here?
There are three reasons this sale is in trouble, and three ways to fix it.
1. You Failed to Communicate Value But it's super-duper! I wish I had one myself!
The primary reason you will ever come up against this objection is because you made one of two errors. Either you didn't listen when they told you what they wanted, or you did not present what they wanted in a manner in which they could understand it, or both.
If you listen carefully during your sales process the customer will tell you exactly what they want and what they are willing to pay for it. If you don't hear exactly what they want, or what they are willing to pay for it, then ASK!
You simply must become skilled at listening to what a client says and filtering out the key buzz words they use that describe what they are envisioning as their new system. This skill can take a long time to hone, but done properly, it is very, very profitable.
For example, a customer might tell you that they want to be able to listen to recorded phone calls or log into the system to see what the employees are doing. While you might have some type of personal or moral objection to this activity, you have to put that aside because what they are really saying is: "someone in my office is screwing around and / or stealing from me and I am going to catch them."
This guy is a security nut, or a freakishly paranoid boss. Either way, security is your ticket. This guy doesn't buy a phone system. He's buying a reason to fire someone who has been screwing him.
This is the same guy who won't really care about hackers trying to break in the network, but he'll pay through the nose for one feature of the firewall: the proxy that saves information on who does what and where they go on the internet.
If you have come up against this objection, check your intentions. Are you, as an IT Professional, helping the customer make their purchase or are you just trying to sell them something
you think is great?
2. The customer doesn't understand what they want. But I thought Office came with Windows!Customers are customers because they are not an IT genius. They don't know what they want. They just have a problem they need solved. If their toilet was broken, and you told them use a floppy disk to fix it rather than a plunger because it was cheaper, they would probably try it.
This is largely a trust issue, and revolves around communication and relationship. If they don't know what they want, they cannot possibly understand what it costs. If they trust you, they'll buy. If they don't, they'll ask for something "less complicated."
Build trust before you present a quote.
3. The customer is generous with everyone else's money but their own. I don't think it should cost that much.
These people are just flat cheap. They charge huge fees to their clients, but when it is time for them to pony up the dough, they try to do everything on the cheap. When you run into these people, just drop it and move on. They are not interested in value. They are not interested in stability, best practices, or quality control. They think that everything should work like a microwave.
If they are solely concerned with cost, pack up and go home. There will always be some other sucker out there willing to work for nothing. You don't want to be that guy.
There are two ways to get rid of them:
1. Charge them 3 times the market rate making it easy for them to say 'no', or
2. Tell them you are not willing to sacrifice quality to get the price down, and that you can recommend some other firms. (Then send them to your competitors that you don't like).
Well just hold your horses there...
Most super-cheapskates do NOT like to be told no. They are used to being in control, and will not feel comfortable when you rip the opportunity away from them instead of the other way around. They may revitalize the conversation quickly. Be prepared for this. Have numbers in your mind so that you can confidently answer questions if they decide to proceed forward. If you do decide to do business with them, make sure you charge them extra to cover the time you'll spend defending your work, and make sure you get paid up front with a check.
There are three more strategies to overcome this objection
1. Stack the Deck in Your Favor Don't like my prices? You buy it!
This tactic takes guts and salesman ship, and foresight. If you get the impression during the sales process that the client is going to be so cost conscious that they will likely cross the line from customer to nightmare, stack the deck in your favor:
1. Give them a full disclosure of part numbers and charge them retail for commodity items.
2. Give them the quote, and give them time to Google competitive prices.
3. When confronted about your prices, tell them: "You found part XYZ for less on the web? Fantastic! Strike that right off our line items then."
4. Repeat the process with all the commodity products you have on your quote.
5. Keep your prices for your consulting time and your specialty products at retail.
This tactic works because the buyer comes away chipping away 40% of the quote, and they feel like they saved thousands. He gets the pat on the back from the boss, and you come off as a super guy, who is REALLY willing to work with his clients. I once had a client do this, and then tell me: "Now, I want you to make some money, so everything we get off of eBay, we'll add it all up and pay you 10%". They did the shopping, they bought from someone else, and I made the commission.
2. Tell them exactly what you're doing, in detail, until they give up. Because The Chinese Spent Less Time Building the Great WallThe secret here is to explain, in detail, everything you're going to do step by step. Keep talking and adding details until you hear them lose interest in what you're saying. They'll submit. They will be satisfied that what you're doing is complicated enough to warrant the expense as long as you can link EACH STEP to something they value. If you're missing that last part, you're toast!
3. Use Sticker Shock to Your Advantage You can hire me, or buy a car. Still interested?
There are only two times that a customer will find out you are expensive. Before they choose to work with you, or after.
If they find out you are expensive before, and they still choose to work with you, then they know that going into the deal, and are very willing to pay the bills.
Conversely, if they find out afterwards, they get sticker shock, soil themselves, and start the negotiation process.
So sticker shock can be a powerful sales tool or it can be a deal breaker. It's all in the timing.
For example, let's say you were looking for a brain surgeon to remove a Wii controller from your forehead your cousin pelted you with after you ravaged them at Mario Kart. Do you want the world renowned brain surgeon or do you want the guy who got his medical degree by mailing in box tops of Fruity Pebbles? Of course you want the world renowned brain surgeon. When you walk into his office, and see there is a gold plated sign that says "No Insurance Accepted. Cash Only", will you get up and walk out or hope that you'll be able to afford it?
That's right: you'll hope. That's what you want your clients to do: just
hope that they can afford you. Then, when they find out that you're not cheap, but you
are affordable, they will jump at the chance to sign your contract.
Big Yes vote from me.
"Read it again!".
Excellent advice and a well-written Article.
Thanks and a big "Yes" vote above.