23 Oct Don’t tell your prospect the price
Why limit yourself by setting a price for your product? Tom Castley shows us how to maximise revenue.
In June we staged our first Sales Confidence conference at HereEast, in London’s Olympic Park. We called it SaaSGrowth2018. We had over 200 SaaS professionals in the audience, watching more than 30 of London’s foremost SaaS experts share their knowledge. Even if you couldn’t make it, we want to share the inspiration and education with you through our SaaSGrowth2018 articles.
‘How to successfully navigate, negotiate and sell to FTSE 100 companies and enterprise accounts’ was the title of one of the morning sessions. We were excited to welcome 5 sales experts to the SaaSGrowth stage to talk about how they do business.
Tom Castley is RVP at Apptio and a long-time friend of Sales Confidence. He spoke at one of our early events and brought the house down with his punchy, iconoclastic style. At SaaSGrowth2018, Tom shared with us 17 things that drive success. One of his tips was on the subject of pricing.
‘If you’re not sure about the price, don’t give it to them. Ask them to give you a price.’
How to do it
When a prospect has no idea of what the price of your product is supposed to be, and you’re not sure what they can afford to spend, your ideal situation is to get them to name a price.
This is difficult, but if you use the correct sales techniques, you can make it happen. The trick is to do it before you’re in the negotiation stage. When you’re actually negotiating a price, the prospect is likely to keep their cards close to their chest, but Tom says it’s possible to broach the subject earlier.
‘I say to them, ‘I’m really concerned. We’re halfway through here… just not seeing the value. I don’t think you can afford it. If you were me, what price would you put on this now?’
Moment of truth
Once you’ve asked this question, you’re at a crucial part of the sales process. This moment of truth is a reason that salespeople will often avoid trying to get the prospect to name a price. They’re worried the prospect will suggest something ridiculously low, and it will be hard to come to an agreement after that. Tom doesn’t see it that way.
’99 times out of 100 they put a way higher price compared to what I was thinking. After that, the skill is not to get excited!’
Take it to the next stage
Of course, even though the prospect has suggested a price that you would be overjoyed to close at, you know there is still work to be done. The prospect is likely to be suggesting a price that they believe to be low. There is room to drive the price up a little and close at an even higher level.
‘What I do is sigh. (Ah!) That wasn’t anywhere near what I was expecting (which is partially true. I’m not lying!). How can we build that up a bit?’
Once you’re at this stage, it’s very likely you’ll close the deal, at a level where everyone is happy.
Over to you
What do you think? Do you use a technique like this to sell when you’re not sure what price you should be charging? Maybe you’d like to share what you do in this situation? Let the Sales Confidence community know by posting down in the comments.