Inside Sales Telesales Tips Blog

Price Negotiation and sticker shock: why sometimes even the experts fail

I don't care how smart or seasoned a sales exec --- or sales trainer --- is, sometimes he or she will fail to bring in a big deal. Today, it's true confession time. I'm going to tell you about a deal I lost this year, then tell you a question I could have asked that might have saved it for me. I don't want you to lose the deal like I did, so listen up!

First, a little background. My sales training company has had another great year this year. We're unique, totally customized, and my customers will tell you I'm the hardest working classroom trainer in the biz. We don't have trouble convincing prospects that we're the best. But even when they know we're the best, we still have to negotiate the price. Sometimes they can't afford it. And lots of times, if that's the case, they won't tell you. They just won't answer your calls (sound familiar? It should. It happens to all of us.)

This particular prospect was a really huge company that I'd guess most of you had heard of. They'd had a bad experience with their prior training company. I spent an hour on the phone with their sales exec, and he liked what we had to say, and how we'd solve the problem. He had loads of telesales reps, and it was going to require about 6 weeks of my time as well as the resources of an additional person from my company. As the call was about to end, I asked "price issues aside, are you convinced this is the training solution you want?" He replied that it was, and asked for a proposal. I said I'd get it to him within 24 hours, and did.

But after receiving my proposal, he never returned my calls, and totally went dark. I'd lost the business, and guessed that it was probably sticker shock. I always tell the people I train that you're gonna lose some, but the greats in this business learn from the losses, and don't replicate them. So in retrospect, what I should have done right after I asked that earlier question, was ask the following:

"Now that you've told me that this is the course you want, what are your expectations in terms of the investment required to move forward with it?"

In other words, tell me what you think you're going to pay. This is a really huge question, particularly important if you're located in a part of the country where folks are used to paying top dollar for high-end solutions (think SF, Boston, New York), and you're selling into geographical areas that may have lower expectations in terms of pricing. In my business, there are loads of people selling sales training for $100 per person per day, and most of them are located away from the geographical areas mentioned above. I put way too much time into customization and delivery to compete in that price space. And just about every one of you reading this post will have a similar sales situation in terms of price expectations based on geography as well.

So let's distill two great questions from this experience of mine, so you can learn from my experience. You'll want to use these questions when the prospect loves your solution, but doesn't yet know what your pricing will be. Be sure to ask the following:

1) "Price issues aside, are you convinced this is the [solution] you want?" (and the prospect answers affirmatively)

2) "Now that you've told me that this is the [solution] you want, what are your expectations in terms of the investment required to move forward with it?"

The prospect's answer to your second question will tell you whether you've got an instant go, you need to negotiate a bit, or you need to walk away. The best sales people always want to know why they've lost a transaction, but if a disgruntled prospect doesn't return your calls, you'll never know why.

When you've got a prospect that just loves your solution, be forewarned: if you don't ask the above two questions, you could lose the deal. Add those questions to your Best Practices playbook, and you'll do a superb job at price negotiation.