Cost is what your customer will pay over the lifetime of using your product or service. Cost also refers to how much your customer will lose by not buying your solution.

Price strictly refers to how much your customer will pay when the cash register rings.

Instead of leading off the conversation with what your product can do and how much it will cost, ask your prospects to describe their challenges in meeting their goals and how much will be lost if the objectives aren’t met. Here’s an example:

 
Salesperson: "What are your three biggest challenges in meeting your revenue goals this year?"

Customer: "Reducing operating costs, increasing productivity, and boosting sales volume."

Salesperson: "By how much do you need to cut your operating costs to succeed?"

Customer: "I need to cut my operating costs by $1 million, and I don’t know how I am going to do it when we need to outfit every employee with a computer for a total cost of more than $2 million."

Salesperson: "What if I could show you a way that will help you cut your costs by $1 million and increase your productivity and sales volume?"

Customer: "Show me how."

Salesperson: "By using network computing, you will be able to put computer terminals on everybody’s desk for half the price of installing PCs. By doing so, everyone will be working off the same page, productivity will increase, and so will customer satisfaction. The cost of this solution is $100,000, a small investment for solving a $1 million dollar problem."

If you can have the customer explain the problem and how much it is costing him or her, many times the problem will be more expensive than the cost of a solution. When you position your solution in this manner, it is no longer a case of how much the customer is willing to pay. It now becomes a case of whether or not the customer can afford not to accept your solution.

Understand that price objections are common. The salespeople who handle these objections well are the ones who concentrate on the costs of the customer’s problem vs. the price of their solution.
 

Ron Karr is a professional speaker, consultant, trainer and author who specializes in helping organizations to dominate their marketplace and assisting individuals to get closer to the people they serve. Ron’s Titan Principle™ has generated tremendous results for his clients in the areas of sales, negotiations and customer service. Call 800-423-5277, fax 201- 461-5621, or visit Ron’s website, http://www.ronkarr.com, for information on results-oriented services and learning tools (including his books, The Titan Principle™-The Number One Secret to Sales Success and The Complete Idiot’s Guide to Great Customer Service).