Monday, January 2, 2012

Influencers from Around the World - How to Present Price Effectively

Marco Germani is our guest writer to start the New Year. Marco has been sharing posts with readers for a couple of years now and has written a book on persuasion in Italian, I Meccanismi della Persuasione. Marco always brings his unique perspective to his posts so I’m sure you’ll enjoy reading his views on How to Present Price Effectively. You can connect with Marco on Facebook, LinkedIn and Twitter.

Brian, CMCT 
Helping You Learn to Hear “Yes”.

How to Present Price Effectively

As we all know, in a negotiation price is almost never the only factor that determines the good or bad outcome. There is always at least one other factor along with the price which decisively influences the final outcome; in other words, if the only obstacle to the successful conclusion of the negotiation is price, in most cases the two sides can find agreement. Let's look at three ways to best present the price of our product or service and maximize our ability to successfully conclude the sale.

1) Never talk about price until you have explained value.

Jeffery Gitomer is renowned for saying that people hate to be sold but they love to buy. Therefore there is a great proliferation of shopping malls in our cities in Italy; places we feel we can freely choose what to buy without the pressure of a seller perhaps using some subtle technique to manipulate us. In addition, each article has a price tag on it so we can immediately attach an economic value to what we see and evaluate immediately whether we prefer to keep that amount of money in our pocket (or bank) or exchange it for the pleasure or utility that the product can produce in our lives.

In the case of a direct sale, which requires the knowledge and skill of a professional vendor, the price has completely different role. The potential customer, as we begin to introduce our product, often has in mind one question, “How much is it?” To unveil the price too early in the presentation is a very common mistake of inexperienced salesmen. The priority, in fact, must always be to communicate and explain the value of the product before communicating its cost. For example, if a customer asks me too soon the price of a product I am presenting, my response is, “Dear customer, the price is the best part of this product and I will cover this subject shortly, but first I want to explain why this product could solve that problem of yours you mentioned earlier, improve your life, etc..”

2) Break-down the price as much as possible

The same price can be communicated in different ways and have a completely different impact on the buyer. If I am presenting a nutrition program based on food supplements, which cost 100 USD per month, it will be my duty, when I go to communicate this price to the prospect, to affirm that the program costs “only 3 USD a day.” In this way the potential customer’s mind is focused on the daily price, comparing it with how much they already spend each day for food, rather than focusing on total spending of 100 USD. I'm not lying or trying to manipulate the prospect, I am just presenting the same information from a different angle, which, after all, is exactly the object of the study of persuasion.

3) Explain the price in relative terms

If I have to sell a training course worth 1,000 USD, I will address the issue of price as follows, “The COST of this course, which is what is necessary to the company that organizes it to cover the costs of educational materials, rent the hall, pay the people who work the event and the speaker, is 1,000 USD, but its VALUE is at least 100 times higher. If we were to charge for the value of this course, we would have a price so high that very few people could afford it.

And, in the case of a book, “The price written on the cover is just what the publisher needs to cover the printing costs, the supply chain to bring it to the library and ensure a minimum profit to the people involved, but its value is also much higher. If the prospects objects, stating 1,000 USD for a training course is too much, I can put the price in relative terms with the following reasoning, “Let’s say you make with your job 1,000 USD per month. You probably earn more than this, but let us make this conservative assumption. If a person you completely trust in these matters, suggested you to invest in a stock, which can give you a sure income, would you be willing to invest each month 10% of what you are earning now? Now, if you are not aware of this, I inform you that investing in yourself can give you, in time, a return infinitely superior to the best stock today on the market. How many training courses and seminar do you attend each year? (If the person did me the objection of the price, the answer is almost always zero). If you decide to invest only 10% of your monthly income on yourself, in less than a year, you put aside the amount you need for this course.”

By adapting these three factors to your product or service, you can greatly increase your chances of closing a sale, provided always that you are proposing a valuable product at a fair and competitive price and assuming your primary goal is always to help people, rather than simply to earn a commission!



  1. Thanks Marco and Brian for such an interesting post.

    I agree completely that it is critical to involve the client in a conversation about value before talking about the actual cost of the service.

    However, I find that engaging the client in a conversation about what they, not I, consider the value to be, is a critical aspect of closing the deal. If I can engage the client in their perspective, it gives me a number of advantages including (a) developing a deeper understanding of their needs, attitudes, and expectations, (b) opportunties for greater awareness of natural influence opportunities, (c) favourable circumstances to use one or more priniciples of influence noted by Dr. Cialdini, and (d) build a deeper relationship with the client through the development of trust and understanding.

    The conversation is then naturally "us" talking about the client's problem (some sort of problem is usually why you are there) and their perspective of value rather than "me" talking to them about the value I perceive.

    As with most things in life, there are circumstances that allow this to happen more naturally and others that are far more challenging, such as the one Marco describes when the client asks "How much?" Nevertheless, striving for the conversation about the client's needs and value perspective will increase the odds of success.

  2. (Hey Brian) Marco –

    Maybe it’s just me (or I am in a small minority), but a huge red flag for “being sold” is a salesman who refuses to tell me the price before he explains the value. I agree that presenting price in perspective ($ per day, $ spent on other, less effective options, etc.) can be effective in helping the customer rationalize the purchase, but especially for a young salesman, you lose me at “I will explain price to you later.” That tells me you don’t value my time or you think I am captive to your presentation.

    I think the general point of ideally disclosing price later in the presentation holds, but if you are asked specifically to name the price, you withhold it at your peril.


  3. Dear Bob and Bill,

    thank you for your very interesting comments, here are my views on both:

    1) Establishing what is valuable for the customer, in my vision of the sales, is part of the process that PRECEDES the actual "act of selling". Before I even mention my product or service I need to identify with the customer a problem he needs to solve or a situation ne needs to improve, only then, as a salesman, I start to describe a solution to the customer's need, which includes my product. Only then, I explain the value of my product, only because what is valuable and needed on the customer's side has already been identified. Reading your post, I understand we are fully alligned on these points. My own post, was referred to a later part of the sale process, when the customer's need is well identified and we are already discussing the solution and its cost/value.

    2) Bill, I too, would tend to feel unconfortable if a salesman would delay telling me the buying price when I ask, but I don't consider myself a "typical" buyer and probably you aren't either :-) most of the people kind of like when they see the other person is in charge of what he's doing and is not afraid to delay a part of the process, if it is not the right time to expose it. However, as always, flexibility is always the key, if I see my prospect is not happy with me delaying the price discussion, I just speak out how much it is and, at the same time, I also warn my prospect that, if price is his only concern, I can advice him where to buy a product similar to mine, at an extremely cheap price (with the hidden assumption he'll get a piece of crap). I also like to say that, if one wants a car, he can buy a BMW but he can also buy a HIYUNDAI, it is always a car, and usually they get it right away.

  4. Bob,
    As I read you comment one word came to mind - questioning. I've been taught, and read in multiple sources, that good salespeople will talk 25-30% of the time. The reason that's the case is because good salespeople ask a lot of questions. Those questions will uncover needs and allow the salesperson to show their value at the same time.

    "The customer is always right" came to mind reading your comment. The salesperson would proceed at their own peril if it's clear the customer wants price up front. However, if that happened with any consistency I would wonder about the salesperson's ability to qualify potential customers. If a salesperson knows their price will be higher than most competitors then they should make sure well before the presentation that they're dealing with customers who aren't just shopping for low price. That's accomplished through questions and an upfront close.