Overcoming Price Objections
The higher the price of your product or service, the more the prospect is likely to experience "sticker shock" – a resistance to paying that much money, no matter how much he wants what you're selling.
Sticker shock is that unpleasant moment when the prospect gasps (aloud or silently), and thinks: "It's THAT much money? Why??" When the prospect immediately rejects the price as too high, that's sticker shock.
Fortunately, there are a number of sales and marketing techniques that can help us overcome sticker shock and get people to pay the hefty prices we are asking for our products and services.
One trick that works is to talk first about higher-priced products than the one you are selling. Then give your price that, while substantial, is still less than the numbers you've been throwing out.
For instance, if you are selling reading specs by mail, mention in your ad that laser eye surgery is $1,000, new eyeglasses can run $300 at an optician's, but your mail order reading specs are just $19.95.
If you are selling an options trading course on video, first mention your $1 million minimum private managed accounts … your $5,000 trading advisory … and your $2,000 live seminar. By the time you get to the videos, the prospect will actually be relieved that they are only $299.
Retailers know this trick well. If they want to increase sales of the $50 sweaters, they put the sweaters on a table so that when the customer walks down the aisle, he sees the $150 sweaters first. Then the $100 sweaters.
When he gets to the end of the table, $50 for a sweater seems like a bargain – and he buys one.
An aluminum siding salesman always asked his prospects, "What do you think it would cost to side your house in solid oak?" After the prospect made her guess, the salesman then said: "Now let me tell you 10 reasons why aluminum siding is better than solid oak."
Of course, the buyer was relieved to hear that this superior aluminum siding cost much less than she thought the oak would cost.
This is an example of another proven sales technique: making an apples-to-oranges comparison. For instance, ads for Georgetown's American Speaker, a loose-leaf course on public speaking for executives, compare the $297 subscription price to the $5,000 a top speechwriter would charge to write just one speech.
Spreading out the payments can also help eliminate sticker shock. Rodale and Franklin Mint are well aware of the appeal of several smaller payments vs. one large lump sum.
The Franklin Mint was selling a chess set by the piece, with each piece costing $17.50 and advertised as a collectible figurine in its own right.
A collectible figure for $17.50 sounds reasonable enough, until you realize that a chess set has 32 pieces, and therefore the full set sells for a hefty $560 – a price that would give all but the wealthiest chess enthusiasts a bad case of sticker shock.
When selling big-ticket items, offer leasing as an option and quote it up front. A sticker price of $10,000 may be too much for the customer's budget to handle. But with financing, you reduce that cost to a low monthly payment of only $322.
State the price in terms that make it seem smallest. Even if you want full payment up front, state the price in your promotion in terms that make it seem smaller.
For instance, a term insurance policy with a $350 annual premium gives you protection and peace of mind "for less than a dollar a day." A $100 membership in a trade association brings you all the benefits for a small daily fee that's "less than the price of a first-class postage stamp."
Value the component parts of the product you are selling. If you are promoting a set of tools in a nice toolbox, list the individual tools in the set. Show that the retail prices of each, when added up, come to much more than the package price -- therefore the buyer is getting a great deal.
Even better: Position one or two of the product elements as premiums the buyer can keep even if he returns the product. Offering "keeper" premiums usually increases response.
For our toolbox example, you could throw in a couple of free screwdrivers or wrenches. Or make the toolbox free.
Or say you sell how-to audiocassette programs. Instead of selling your 8- CD audio album for $69, say it is a 6-CD album for $69. Then position the other two CDs as premiums. People will think it's a better deal because they are getting two CDs free.
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