Stan was frustrated. He kept getting “shot down on price” during discussions with prospective buyers. He knew he was supposed to talk directly about money issues before making a presentation ... but somehow, he never seemed to iron out the details in a way that gave him a clear sense of whether the buyer felt his pricing was acceptable. Buyers always seemed to play their cards close to the vest. He decided to ask his manager Phil for help.
“Phil, I keep hitting a brick wall when I start asking about budget. How should I handle the price issue?”
Phil looked up from the spreadsheet he was working on and said, “Have you tried bracketing?”
Stan had never heard the term before. It sounded like something to do with carpentry. “What’s that?”
Phil smiled, switched off the monitor, and asked Stan to close the door and take a seat. Here’s the gist of what he said.
You cannot let prospects leave you guessing about how much money they are willing to pay for your product or service. One effective way to get prospects to share how much they are willing to pay is to use a technique known as "bracketing."
Bracketing entails asking a series of questions that allow you to zero in on the money investment the prospect is willing to make. The idea here is to get specific by identifying a range that works. Even if the prospect says something that seems encouraging, like, "Money is no object," you still need to identify the range.
So, in the case of “Money is no object," you might respond by asking, "I appreciate that, Mr. Prospect. There are a number of plans we could be looking at; they range from about $30,000 to $60,000. Would you say that you would be more comfortable somewhere between $30,000 and $45,000 or between $45,000 and $60,000?"
If the prospect responds by stating that he would be more comfortable between $30,000 and $45,000 you would then ask, "Would you say you're closer to $30,000 or closer to $45,000?" If the prospect responds and says closer to $30,000 you would then ask, "Can you tell me how close to $30,000?"
Congratulations! You now know that your prospect is willing to spend approximately $30,000 to acquire your product or service. You uncovered that information by means of a simple questioning sequence that left both parties feeling comfortable -- as opposed to a single question or statement that adds stress to the conversation and shuts down communication.
It is possible that you will conclude, based on information that you collected during earlier discussions, that the product described by the prospect cannot be purchased for the $30,000 that he is willing to spend. If you are aware that what the prospect wants will cost more than he is willing to pay, you can simply say, "Mr. Prospect, we have a problem." Let the prospect fill in the silence that follows. Almost invariably, you will hear something like, “What's the problem?" You can then say, "I am reasonably certain that the plan you have described is going to cost closer to $40,000 than it is to $30,000. What can we do about that?"
The prospect may respond in any number of ways. He may say that his budget is only $30,000 and that he cannot spend $40,000 for the product or service he wants to acquire. Sometimes you can overcome this seeming obstacle by setting up a payment plan. Another approach might be to ask the prospect if he is willing to cut back on some of the features or to consider a lesser model than the one he was looking for.
In any event, the issue of price must be resolved without guesswork in order for you to continue the discussion. If you can successfully overcome the issue of price, you may close out the money discussion and move on. If you are unable to resolve the money issue, then you may be forced to abandon this particular prospect. That’s a good thing. There’s no point investing your time with someone who is unwilling or unable to pay your price!
By following Phil’s advice, Stan was able to have much more productive conversations with his prospective buyers. He spent less time guessing and more time with qualified buyers. He was able to create better, deeper discussions about price...discussions that eventually led to a higher percentage of successful presentations.