Let's talk about money!

Money is one of those subjects that is universal and in a sales role a subject that must be discussed and yet many salespeople have difficulty comfortably and naturally talking about money with prospective customers.

One possible reason is something called money weakness or money discomfort, and it affects a salespersons ability to naturally discuss money, uncover the budget or substantiate a higher price solution under pressure.

The outcome of this discomfort can be vary.

• You may too hesitant in asking questions to uncover the budget.
• Accept a figure as budget and be reluctant to probe deeper to verify it accuracy.
• Discuss money so awkwardly that prospects feel uneasy and quietly end continuation.
• Become prone to discount rather than discuss and support the value of your offer.
• Reduce margins to avoid the discussion.

Like many weaknesses around sales execution a money discomfort is insidious, will affect you sometimes so subtly that when the call ends, you are left wondering what the hell happened.

The issue is doubly difficult if you and the prospect have this discomfort (as it applies to anyone) and can lead to serious miscommunication, misunderstandings, inappropriate quotations, and ultimately lost deals or lost profit.

The first part of mitigating the effect of money discomfort is recognising its presence this requires continuous self-analysis and accountability.

One of the ways to take small steps to correct you’re the resultant behaviours of your discomfort is to talk about money more often and desensitise yourself to the subject over time.

Price Conditioning

Price conditioning is openly discussing costs of problems and solutions often throughout a sales interaction. Not only will this help you get a better understanding of a customer’s perspective relating to cost of problems or solutions, but the act and repetition of talking about money helps to lessen your discomfort and adopt a more relaxed approach.

Ideally you should get comfortable probing the prospect early on in the sales interaction, using statements like; ‘In my experience the fix for this type of problem costs between $20,000 -50,000, was that your expectation’?’  or ‘Previous projects of this scale have usually been around $20,000 to $50,000 are you okay with that’?  or something similar. You will note the absence of one fixed number or amount and the reason why is covered in the next section.

Anchoring Effect*

The anchoring effect is the tendency for an prospective customer to put down an anchor at the first number(price) mentioned, this then acts as a psychological anchor meaning departures from this first price create a barrier, a hesitancy in the mind of the prospective customer to proceed and usually requires the salesperson to provide greater evidence of the value proposition.

Using a range can lessen this effect and support a more direct path to an offer than appears reasonable as it is within the range previously mentioned.

The anchoring effect means care must be taken when advising the expected cost of any solution that fixes a problem, need or want. If not handled well you can create real problems later on when you have fully understood and costed the project/solution, and this figure is at a significant variance to earlier discussions and numbers that have been advised to a potential customer.

Priming effect*

The ability to provide a range utilising what is known as the ‘priming effect’ in that using pricing in a clever way enables you to ‘prime’ (or prepare) the prospect for the final costs. Most of us use this in our daily lives without even being aware of it.

The trick is to use this priming effect to present a range that is likely inclusive of the final price, but not so wide that it conveys lack of knowledge or experience or in a ay that causes the prospects own discomfort about money to kick in.

Because there are various reasons why a potential customer would provide differing answers about the money/budget available, you must be prepared to probe in differing ways, using different questions to define the true situation and then priming the prospect effectively based on this new information so your proposal is appropriate from their perspective.

More Art than Science 

One of the reasons salespeople find these discussions problematic is because the way you handle this is more art than science.

The situation changes depending on whether you have the money discomfort, or they have the money discomfort or whether it applies to you both and remembering it is not an off or on switch but more of a graduated scale of impact on your ability to progress the sale.

Your role as a salesperson is to overcome or mitigate whatever discomfort you have and help the prospect make better decisions because your solution is provided from a better understanding of their world.

When to ask deeper money questions

If at any point the subject of money is not in alignment with what you have been told (or assumed), stop at whatever part of your presentation/process you are at and get clarity.

This could be an answer, a comment, a look that makes you feel something about the money, cost, or budget is a concern, has changed to what you knew, thought or assumed.

If it is an email or comment made over the phone - call back, if it’s in the middle of your presentation stop and make a note of the concern, don’t be afraid to openly say that you will come back to the point. Then finish the presentation and go back and seek clarity about their reaction.

If you realise you assumed something, and now are not sure then state that you have a misunderstanding and seek confirmation on the assumption or reset and price condition again.

If there really is no money or the solution cannot be afforded, then as a professional you need to tell the prospect straight up and get permission to continue with a renewed understanding or make a professional exit.

Conclusion

Ultimately in most cases there is only you and the prospect in the field of play and only you can determine whether you have the necessary clarity on the money issue, to make a proposal /quote that has a high chance of success.

Price Condition

Anchor Effect

Priming Effect

More Art than Science

Of course, the sting of winning too cheap will last longer than any disappointment of losing - so beware the money weakness.

What your experience?

Are you aware of a money weakness when you interact with potential customers around money?

Send me a PM if you want to engage confidentially on this topic and how it relates to your situation

Reference

1. Book ‘ Thinking Fast and slow’ by Daniel Kahneman*
2. Money weakness https://www.objectivemanagement.com/