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Thursday, December 27, 2012

Never reveal the price until you've built up the value

By Sean McPheat

The old golden rule in professional selling was to never reveal price until the end of your presentation.  However, unlike the buyer of years ago, today’s modern and educated buyer is sales savvy, competitively aware and well informed. Should you still hold out on revealing the price until late in the sales interaction?

Price discussion tips
Discuss price after establishing value

In a word—absolutely!

While there are some products and services in where price is common knowledge, in most cases you should still hold out on discussing pricing until after you have completed your sales presentation.  You must first firmly establish the value before you reveal the price. Here are a couple of reasons why you should never reveal the price until after you have significantly built up the value.

Price is irrelevant until you have established value

First, understand that pricing has no validity until you have built the value. If I came to you and said I have a house for sale, and told you the price was only $1,000, would you buy it? You would have to have more information about the house even at such a low price: Where is the house located?  How many rooms?  How old is it? Do you even need a new house? 

You might say that for a certain price, those things don’t matter.  Yet, what if the house was located in the middle of an active war-torn country 8,000 miles away and was essentially an old fashioned out-house?  Is it still worth $1,000? 

Better yet, let’s assume I came to you to sell a gigantic, pink inflatable chair.  It glows in the dark and floats. Would you buy it for $1,000?  How about $500? However, assume I also informed you that the local damn has just collapsed and within a few minutes, the entire area is going to be 50 feet under water. Would you pay $1,000 for the inflatable chair now?

Price is meaningless until you can build up the value. You cannot build up the value until you demonstrate the need.  You cannot demonstrate the need until you expose and define the problem. 

It is a disservice to the buyer

When you reveal the price too soon, you actually perform a disservice to the prospective buyer.  By giving the buyer the pricing before you have offered all of the necessary information he or she needs to make an educated decision; you have damaged the buyer. 

When you reveal the price, it forces the prospect to begin to make a buying decision, if only mentally.  The prospect begins to formulate their reasoning and logic before they have the ingredients to do so, and the prospect forms a mental disposition on the purchase. Consequently, what you say and do after you reveal the price, falls on death ears and a preconceived thought process.     

When you get that buyer who insists on knowing the price before you have had a chance to build up the value, understand that it is in their best interest that you wait.  Revealing the price too soon, is tantamount to malpractice. 

About the author: Sean McPheat is the founder and Managing Director of MTD Sales Training.
Sean has been featured on the BBC, ITV, CNN International, scores of radio stations and has been in over 250 different media publications. Sean is the pioneer of social selling and social prospecting within the UK, and his groundbreaking book “eselling® – How To Use The Internet For Prospecting, Personal Branding, Networking And For Engaging The C-Suite Decision Maker” became an instant #1 Amazon bestseller.  Follow Sean Online

* Image attribution: Free Digital Photos.net