24 How do you react to price shock? The best story I have ever heard is from a buyer who claimed he could get a sales person to lower their price without saying a word. He said he was able to perfect his “price shock” strategy by practicing on his way to work every morning. What exactly is "price shock?" It is a simple facial expression that says, "Your price seems high!" Well-trained buyers are taught to use this strategy with exact precision. When a buyer is looking at your initial price they are taught to wrinkle their forehead as if to say "you are much higher than I expected!" This is designed to immediately put you, the presenter, on the defensive. The sad part is, it works most of the time. Even if you have a close relationship with the buyer, you may misread it as a sign that you should lower your price to get, or keep, the business. Work on your own price shock until you can perfect it. Every time you buy something act surprised at the price. Watch closely how the seller reacts. If you are buying a new house, tell the realtor you are shocked by the price. When you are in the market for a new car, try it on the car sales person. When you buy a new TV, tell the clerk you are shocked at how much the price is. Whenever you are given a price on anything, act slightly surprised – watch carefully how they respond. Simply say “the price seems a little high”, or “I am sure this is a nice hotel, however, your price seems a little high”, or “I was thinking about buying a new boat, however, your price seems a little high!” Do I use this strategy – absolutely – I use it every time I am presented with a price! I stay in many hotels during the course of a year. Does price shock save me money? One hundred hotel rooms x $10 average savings = $1,000 per year! When I check in I ask for the price – act slightly shocked – pull out my deck of discount cards – act shocked at the discount price and many times get a slightly lower price than the lowest discount. What about when someone is shocked at YOUR PRICE? What should your reaction be? There are four responses you can use for this powerful strategy: 1. You can be weak, give in, and lower your price. They won. This is what most buyers expect, especially from an amateur. 2. You can be shocked at their shock. This is designed to neutralize the strategy. The customer is shocked at your price; you are shocked at their shock. Seems a little strange to use at first, until you see how well it works. This throws the shock right back at the buyer and you have now put the buyer on the defensive. Then stay silent. Do not provide an explanation. It is the buyer's turn to make the next move! 3. You can use the "Feel, Felt, Found" reply. Here is how it works: "I understand why you feel that way, everyone I talked to so far today felt the same way, until they found out that the market has gone up since last week.” 4. You can justify your price rather that discount it. This is an extension of number three. "I understand why you might feel that way, everyone I talked to today felt the same way, until they found out what is included in that price.” And then begin to list the additional benefits that are included, which makes the price seem smaller and smaller. 5. There is a response called a "fork in the road" response that sometimes works on price shock: "Our company came to a fork in the
road and had to make a choice on whether to be a low cost, Bottom line - There are plenty of folks who want to buy just on price and the sales people who sell them could be replaced with a fax machine. Whenever possible, don't discuss price until you've
discussed the validity of your pricing. If forced to give a price prematurely, only offer
a range. Ask questions that will help you understand what the client want. Always add 10
to 20 percent to your high end. It's a lot easier to go back with a lower price than a
higher one. If the customer is going to choke on your artificially high price, he'll choke
on your real top end price, and you'll lose the advantage of being able to quote a final
price that is lower than he expected. I try to avoid the “Shock” effect altogether. I
believe in managing expectations up front. 1st I find out if they have used a similar
service in the past; if not I walk them through the process and briefly mention the cost
(giving a wide range). This should prepare the person for negotiations. If they try to use
the “Shock” effect – don’t flinch. Counter with the “Triangular
negotiation” method. Here you are negotiating three different variables; if you
change one side- I change another side. So no matter what type of triangle you end up with
(right, acute, obtuse, equilateral, isosceles or scalene) its still a TRIANGLE. Teresa Cloninger "I never thought of reacting to shock with shock---I always thought I had to explain why or "attempt to get a lower price". It works though...I tried it by simply saying "REALLY!!" with a bit of shock on my face and said nothing else....He bought the product and we moved on like nothing happened."
I actually used the shocked approach yesterday when it was tried on me - IT WORKED! I said that the previous person had the same shock when they saw the price of the meat slicer, but when I explained that I came along with the deal for service, and explained how the unit would assist with profitability, and that I helped them save alot by directing them to the unit they need to fit their needs... they found that the price was great, and purchased immediately. We got to the 'fork in the road' moment, where I thought I might lose the sale, and went silent. They were a little thrown off, and about ten long seconds later, they asked for the slicer to be boxed up, and asked if I could assist them in finding the rest of the wish list they were carrying. That was a big sale, and an especially happy customer. Craig YoungPrice shock immediately gives you a sense of guilt, which you have to learn to overcome right away and be ready with a come back. A lot of buyers are shocked at the price because they do not understand the quallity of the product such as a home use item compared to a commercial item. Our job is to convince the buyer that it is the right product for their needs, and at good value for their money. Jordan de la Morandiere Email your summary/action steps Bob Oros PO Box 6775 Edmond, OK 73083
Phone 405-751-9191 Copyright © 1996-2007 Bob Oros All Rights Reserved |
