It would probably not surprise most people to know that the number one reason that people tell a salesperson they can't buy their products or services is price. What most people don't know, however, is that it is also the number one lie that prospects use when they don’t want to buy. Think about it, isn't it easier to simply tell someone that their price is high when we don’t want to buy from them? As example, if the real reason is the salesperson did not ask enough questions, did not understand the situation well enough, talked too much, had a personality not like your own, or you didn't trust them; wouldn't it be easier to simply tell someone it's too much money and move on with your life? Over time, if salespeople hear this excuse enough, they start to believe that it's true. Not only does it compel them to want to discount over time, it also teaches them that maybe the value of their product or service simply is not there.
If you dig even deeper into the psychology of price versus value you will discover that when you have an issue that really needs to be addressed, you will typically be willing to pay more. When I hear that a salesperson struggles with commanding their price what I immediately think about to myself is, “that person just got outsold by their prospect”. In other words, the prospect convinced the salesperson that the solution they offered was not worth the price rather than the salesperson helping the prospect discover that it is. The salesperson clearly did not align their product or service with the issue, concern or needs of the prospective customer well enough.
Some of this comes from hearing about the price concern often, as laid out above, but there is more psychology to it than that. Some salespeople were raised with what we call a ‘scarcity mentality’, Rather than one of abundance. Meaning, if you were raised by parents that felt that earning money is difficult, money doesn't grow on trees, acted and behaved like “penny pinchers” or any mentality where finances and money is discussed with scarcity, this can affect a salesperson’s view of how money works. The opposite is also true: if you have an abundance mentality then you might feel that money will always be available, there's plenty to go around, and your time is worth a tremendous amount, affecting you in a positive manner in terms of selling and your ability to sell at higher prices.
We also know, that because of these psychologies, learned since childhood, we end up ‘buying how we sell’. In other words, if you are someone that is always trying to save a nickel then guess what will happen to you typically when someone tries to save a nickel with you? That's right, you will be more prone to give a discount because you would be doing the same thing if you were them.
When we train companies and individuals to sell at higher prices, before we start talking about technique, strategies and even negotiating concepts we dive into the mental side of things first. It takes training and reinforcement, and clients learn how to understand their worth. We ask them to make decisions about their pricing. Some of those decisions might be, “It is my policy not to give a discount”, “We are expensive, and worth it” or even, “when I discount, I am admitting to the potential customer that I am not worth it”. Here are a couple handful of decisions you can make today to help you maintain your price and your margin.
- YOU add value to the equation; every time
- How your company delivers is worth more
- You sell products & services of high value. Period.
- Every time you discount, you are more susceptible to doing it again
- When you discount, you are admitting, “It’s not worth full price”
- When you discount, the customer loses faith and devalues the product or service him/herself
- When you discount you’re putting the company in jeopardy
- The more opportunities in your pipeline, the less likely you are to discount
By the way, what we've also learned about this psychology or mentality is that the way you think about money is probably affecting greatly how much it is that you are earning. Believe it or not, there are people that we know that are not realizing their financial potential because they feel guilty for making more money than their friends or family. In result, they sabotage, unknowingly, their sales results and stop pushing. They coast, accepting the earnings that they make and not striving for anything higher. Although this might sound sad, it is all too common. The way you look at money and the decisions you make about it dictate your financial future. If you don't have a strong financial mentality, if you don't buy on value yourself, if you are always looking to save a penny then you are susceptible to never breaking through to the higher income brackets. What can you do about it? Look to make purchases not on price but on value. Don't make all of your decisions based on how much things cost but rather on what that product or service will do for you. Don't shop around at three stores or three sites to settle in on the very best price. Rather, value your time, make an educated decision, purchase the product or service and move along.
Unfortunately, the older you get the harder it is to change. If you have some bad habits that have been with you for a long time relating to money, and what to change, find help. Sometimes, the brain that created the problem is not the same brain that is going to solve it. Start small. When at a restaurant, for instance, try not to look only at the pricing of the items but rather select the meal that you would like. Don't look for price tags on everything that you shop for. Buy on quality, not simply to save a buck. You can retrain your brain to think differently which can have a profound effect on your selling price and your personal income. Although this is only an article, this can be the start of your new way of thinking and a good start to making and earning more money for yourself.