One of the complaints you will hear from your clients and customers is that your price is higher than your competition's. A complaint about your price is not an objection. This complaint often indicates that your client wants the greater results you can deliver at the lower price your competitor offered them. The fact your contact complained is evidence that they don't believe your competitor will deliver the same results. If they did, they wouldn't be griping about your price.
The Benefit of a Price Complaint
You should appreciate a price complaint because it eliminates a range of problems, challenges, and obstacles that lead to different complaints, many of which you would prefer not to have to solve. You win some of your clients because your competitors didn't command the price necessary to deliver the results the client needed. Without the money to invest in results, you are likely to experience these problems:
- Service Issues: When you set a higher price, your company has the resources it needs to deliver the results you promised when you won a client’s business. A lack of resources can cause service issues, causing stakeholders to complain they are not getting what they need, making it necessary for your main contact to defend their decision to buy from you and your company.
- Client Failures: The delta between your price and your competitor's ensures that your clients are able to serve their clients. Without this level of investment, you will encounter complaints that result in difficult conversations with your decision-makers and stakeholders. These discussions are way more painful than those about price.
- Lost Reputation: A higher price is an insurance policy against reputational damage. Without sufficient resources, you will face problems that can cause a loss of reputation. It creates the kind of experience in which your decision maker and their teams will confess your sins, complaining to anyone who will listen. In a world where everything is known and searchable, your client's underinvestment shows up as your bad results.
- Opportunity to Be Displaced: It is much more difficult to steal a client from a competitor when they are delivering the results and have the relationships that prevent them from being removed, especially not for a couple of pennies on the dollar. Continued failures, however, will have your client taking calls and meeting with your competition. No client is willing to lose their customers to retain your company.
- The Unbearable Cost of Client Churn: Your clients need outcomes that can only come from paying a higher price. If they don’t get those outcomes, they’ll leave you. This leads to churn, which is expensive. Making good on the services you’ve promised allows you to retain your clients, making it easier to grow net new revenue. By contrast, when your lower price results in poor execution, churning major clients can cause negative growth, the shrinking of your revenue.
The truth about your higher price is that it lowers your client's costs because they spend less time dealing with problems.
The Better Results of a Higher Price
The truth about your higher price is that it lowers your client's costs because they spend less time dealing with problems. They also won’t face the issues that would cause them to fail their customers or clients. Your client should never have to defend their decision to choose you and your company as partners in producing the better results you promised them.
One young salesperson told me he “was too poor to buy cheap stuff.” His wife had just given birth, and he didn’t have the money to buy something he would have to replace because it was shoddy. He would invest in something that had a higher price and a lower cost.
The reason your contacts complain about your higher price is that they haven't experienced the better results it allows you to deliver. Better results are hypothetical in the sales conversation, even if everything you claim is true. While references are helpful, you may need to explain where and how you invest the premium you are asking your client to pay. This helps them understand how the investments you make are critical to better outcomes.
You might also have to help the people you are working with to recognize how much money they are losing, by setting low price expectations. Put them in the place of that young salesperson by explaining that "they are too poor to buy cheap stuff."
You are better off with a complaint about your higher price than the complaints that follow your failure. The first one is easier to live with, as it comes in the sales conversation. The other complaints are what cause buyer's remorse, leaving them wishing they made a better choice.
One truth in sales is that your prospective client will pay more for something that’s better than what they have now. It's also true that they will be happier to avoid the distraction of trying to solve problems that could have been avoided had they paid a little more to achieve a lot more.
Most of the time, you only have one shot to acquire the higher price your client needs. Once you agree to a lower price, one that won’t provide enough resources for their success, you'll have a difficult time increasing it later. This is especially true because, at a lower price, you won’t be able to bring them any improvement over what they had from their previous vendor. Anyone can have anything they want, as long as they are willing to pay for it.
Appreciate your higher price for what it is: a better experience and the better results your clients need.