Chapter 26 - What's This Going to Cost Me?

The author mentions his own price-sensitivity in the course of buying a television set for his bedroom. He was reluctant to pay $1,000 for a set, even though he paid almost twice as much for the set in his living room. This had nothing to do with features or capabilities, merely that the unit in the bedroom was "just a sleep aid" and he didn't value it as much.

That's a critical difference to be aware of: the seller's idea of a fair price is one that covers their costs and gives them a decent profit. The buyer, meanwhile, is concerned only with his own needs in deciding how much he feels like paying for something - regardless of its features and functions or what the cost of the seller.

Pricing is part of every sale, and too many salespeople see the discount as the primary means of negotiating with a client. However, there are often other reasons a customer may not be interested and reducing the price will not budge them. For example, if the customer doesn't see the value of the service, the solution is to explain the value to them so that they are willing to pay for the service.

The fictional dialog in this chapter involves a salesman who discounts three times during the course of a brief conversation, for a customer who never said anything about the price.

This takes the author on a side-trip to "the power of silence" in a negotiation, and the way in which merely leaving a pause can cause an inexperienced or desperate negotiator to make an additional concession because they take the other side's silence as rejection of their previous offer.

Back on topic: the author suggests that the prospect's question of "How much is this going to cost me?" is really a question of "How much do I need this?" It should spark a conversation about the benefits of your service to his business that justify its price, not a price negotiation.

In the rewrite of his dialogue, the salesman responds to the prospect's balk by asking if they have any questions about the price, then the prospect expresses doubt about whether the service is worthwhile, which gives the salesman a clear opening to present some calculations that demonstrate the price will be returned by monetary benefits. He still ends up reducing the price, but only once, and with the stipulation it's a discount for the first six months of a two-year contract.