What your customers might mean when they say, “You’re too expensive.”
“You’re too expensive. You’re going to have to do better than that.”
Every salesperson has heard these statements at some point, and the natural reaction is to lower the price. In The Buying Zone, we look at why the customer might be saying this, and we explore more effective ways to respond, rather than just an immediate price reduction.
Assuming your price is reasonable (within the market expectation), why would the customer think your price is too high? It might have nothing to do with your asking price after all, and the reaction could be related to one of two main reasons. We cover both of those in our new book: The Buying Zone.
The first possible reason may be because not all of the essential buying elements are satisfied in the customer’s mind, and this can lead the customer to feel they are Forced to make a purchase. When a customer feels forced to buy something, they will most likely search out the cheapest or easiest option. It’s the same for all of us when we need gas for the car or milk and eggs for breakfast this week. If there isn’t a desire in place for a specific brand of milk or kind of eggs, you’ll make your buying decision based on price and ease of purchase and not much else.
A customer can feel forced to make a decision when they need something and can afford it, but they don’t have the desire to make the purchase or particularly like the buying experience. All that is left is a need and the money to make the purchase. The combination of those two elements drives the buyer to focus on the easy and/or cheap route most of the time, hence the “you’re too expensive” response. This could also result in the “you’re too far away” or “your process is too difficult” responses. When being forced, the buyer immediately goes into comparison mode and compares you to all of the other options available, and the cheapest or easiest option usually wins.
The second possible reason may be that your product or service does not have sufficient Value in the buyer’s mind.
We address the idea of value specifically in The Buying Zone:
“What is value? There are several definitions of the word value. Value can refer to an item’s cost (example: a house could be something of value. It costs a lot of money to purchase a house, so we consider it a high value item), or it can refer to the amount of usefulness a product or service offers in relation to its price. Here’s a quick example: I need an extension cord to run from my desk to the wall outlet, so I purchase a 3-foot cord with a power strip for $5. It has high usefulness for a very low price. If a product delivers high usefulness for a low price, we would consider the purchase to be High Value. If something has low usefulness for a high price, we would consider the purchase to be Very Low Value.”
We see here that there is a correlation between how useful a buyer sees your product and your asking price. Your price may be just fine and affordable, but if they don’t see it as sufficiently useful, the conclusion will probably be you’re asking too much for your product or service. In this case, all the buyer needs is a 3-foot extension cord that a few items can plug into. They don’t need a 25’ cord that can handle the power an oven puts out. That would be considered too expensive, hence the customer’s reaction.
So, how do we address these two reasons?
With the Forced situation, work to address what is missing: a desire for your product or service, or a preference for purchasing from you.
Think about it. How many times do all of us drive far out of the way to eat at our favorite restaurant or shop at our favorite store? We’ll even pay more for it. Why? Because desire and preference exist for those businesses that doesn’t exist for the restaurant or store that are closer by and less expensive. We don’t want those options. I look around the parking lot at the local department store and see a wide variety of automobiles that people choose to drive, from the most inexpensive and worn out to the newest and most extravagant. People will pay for what they desire. They won’t pay for what they don’t want, unless they need to, then they will choose the lowest priced option.
The Buying Zone discusses in detail the aspects of admiration and desire:
“To desire something means to not only notice something’s admirable characteristics, but to seek to possess them, as well. This means I am willing to pay for the product or service and actively seek it out.
The primary difference between Admire and Desire is: Admiration is to look at something with pleasure or appreciation. Desire is seeking to possess it. There are lots of things you Admire that you don’t seek to possess. It’s a big difference.
A great example to consider is a particular electronic consumer product, one of which is so prevalent and common in our culture, that nearly everyone has one. But, it wasn’t always this way. There was a time, before this product existed, when no one even knew they wanted it!
In 2001, Steve Jobs stood on a stage, wearing his standard black turtleneck sweater, Levi 501’s and New Balance training shoes and waxed poetic for thirty minutes about his, Apple’s, and humanities love for music. He described how it makes us feel, how it unites us together, how it describes our emotions and even shapes our culture. He ventured to say it should even shape our technology as well. He described a music device that could contain “every song you have ever purchased” and play without skipping due to speed bumps, and on top of all of it, it could fit in your pocket!
The crowd almost laughed at the very notion of the idea.
Until they saw it! Then, they gasped, and ruptured with loud applause. They had no idea that Steve had the new device in his pocket the entire time, and when he finally pulled it out, he revealed the iPod to a standing ovation. This beautiful mix of storytelling, marketing, and product placement caused the audience, and shortly after, the entire culture, to want an iPod. The rest is history.”
Companies work very hard to create desire for their product or service in the minds of consumers. It’s a powerful force. That’s the real art of selling: to show the benefits and quality of your good or service as something the customer would seek to obtain.
With regard to value, that’s about showing how a customer can use or benefit from your product or service vs. what they will pay for it. The most effective tool in a salesperson’s took kit is clear anecdotal evidence of the usefulness, benefit, and quality of their product in comparison to the cost. If that can’t be clearly discussed and shown the customer, then the salesperson isn’t left with much else than to be the cheapest or easiest option.
Case in point: my computer mouse recently stopped working, so I headed to the store to buy a new one on my lunch hour (the store that was only ½ mile from my house). I didn’t want a wireless mouse, I prefer to use a corded one. I needed a new mouse, and there wasn’t any need or desire to buy anything more fancy or expensive than just a basic one, so I picked out the cheapest one from the store’s selection.
This is a classic example of how many buyers make purchasing decisions. If there’s a need, with no specific desire or preference, ease of purchase and cost savings are the main the driver. So, the objective of any salesperson is to build desire and preference for his or her product or service.
It’s clear that humans don’t always seek out the lesser priced or easiest option, as we purchase things we want or prefer all the time. So, if the customer is telling you that your product is too expensive or too difficult to use, try addressing what’s missing in their mind by creating desire or preference, or increase the value they see in your product. That’s the first step to getting the customer on their way to The Buying Zone.