5 Tips to Shift the Conversation Away from Price

BY IT GLUE | October 29, 2019

We’ve all been there before, trying to close a sale but all they want to talk about is price. And here you are wanting to retain your employees and maybe have a bit left over at the end of the month to pay your mortgage. When you get right down to it – the price conversation is the start of a race to the bottom, and you don’t want to be in that race at all.

So how do you shift the conversation?

Tip #1 – Focus on Value

A value-based pricing strategy is rooted in charging what the customer is willing to pay. If they’re arguing about price, they’re not seeing enough value. You may be offering a lot of value, but for the prospect perception = reality, so you need to shift their perception.

Remember, the average small business owner doesn’t know that much about IT and probably cares even less. If the prospect is looking at you like you’re an expense line item, you’ll only talk about price. But that view is shortsighted, so your job is to convey that to the prospect.

The first thing you have to communicate is that IT isn’t a line item. In 2019, IT is an integral part of any business. We are all tech companies, even the ones that don’t think they are. Some of what you sell prevents losses such as downtime, ransomware and other cyberattacks. Downtime is a big differentiator between elite MSPs and cheapo ones. An elite MSP is more responsive, solves tickets faster, and does it with a smile. The elite MSP documents their track record, either in stats or testimonials, and uses these to prove their track record.

The security thing is a big one, too. Prospects don’t know that much about security and many can be swayed by someone offering firewall and AV on the cheap. So come equipped to counter this, both with facts (the shockingly high risk of cyberattacks and ransomware) and emotional arguments. Someone breaking into a company’s data should hurt like breaking into the owner’s house. They should take it personally.

Tip #2 – Show Prices Up Front

If the prospect is determined to talk about price, here’s what’s going to happen. You’ll spend your entire pitch talking about value, how awesome you are, how your customers are like family, and all that good stuff. Meanwhile, the prospect is sitting there thinking about price, because they know they’re being sold to and most people’s plan of attack is to negotiate a bargain.

So give them the prices early on. This is fairly easy if you structure your offering with a few packages, and maybe a couple of a la carte options. Just something simple. If the price you list up front is way more than they’ll ever pay, then they’ll walk away and neither of you will waste any further time on a conversation that’s not going anywhere anyway. Think of the price as part of the qualification process.

Tip #3 – Use Comparables

Sometimes, your prospect is deciding between an MSP and an in-house tech. This should be a slam dunk, but they’re probably thinking in terms of what you cost versus what a single tech costs.

First, remind them of the all-in cost of an in-house tech, including things (like healthcare) that really jack the price up. Then point out turnover risk. With unemployment for techs being so absurdly low, they’re difficult to retain, and expensive. You’ve got an army of them. Plus, if the prospect is looking at one tech, that tech is going to take vacations, or could quit at any moment, leaving the prospect entirely in the lurch. You won’t do that. And the prospect probably isn’t taking these costs into account.

Tip #4 – Testimonials

I mentioned this above, but it’s worth emphasizing. One of the most powerful ways to break a price impasse is with testimonials. Here’s why. A lot of prospects are skeptical of sales people, and the sales process. To protect themselves, they take a defensive posture, which means that they aren’t necessarily willing to believe all the wonderful things that you’re telling them. Price is tangible, an absolute they can trust. Your word on how amazing you are is not nearly as tangible. But you can make it more real with testimonials from some of your other clients. Seeing is believing, and until you’ve fully established trust with the prospect, the best way for them to see is often through the experiences of others like them.

Everyday testimonials are easy to get – just ask for them – but they aren’t as valuable as in-depth case studies that tell a concrete story about the value you bring. This is the whole “seeing is believing” thing.

Tip #5 – Remember Your BATNA

It’s perfectly reasonable for the prospect to talk money, and for you to have some room to negotiate. But the money conversation is a lot easier when you have a clear sense of where you’re willing to draw the line. Think of it this way. If you go into a negotiation thinking that you really, really want to win this business, you’re asking for trouble. Better to enter into the conversation with a clear understanding of your BATNA – best alternative to a negotiated agreement. Knowing your BATNA can put you in a position of drawing a clear line. It is sometimes better just to walk away than to accept the business on terms that are as likely to harm your business as help it.

The price conversation can certainly be awkward, but there are ways to deal with it. You can choose to negotiate prices, too, of course, but don’t let that be the only thing the prospect wants to talk about.

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