How much does this cost answer

When I first started in the financial services industry in 1989, I was given a manual and a video of how different commissions work. Back then I remember having this VHS video to help me understand compensation. I wish I kept it to see how much the world has changed. Imagine you are sitting with a new prospective client and they ask” how much does this cost” and you hand them a video and a manual to explain how much it costs. Understand that compensation is all about proper disclosure, but having a simplified answer that is easy to understand and remember is critical in the trust building process.

Do you have a scripted answer? Is it easy to understand and remember?

Do your clients understand and remember, or do they ask you again at progress update meetings how your fees work? Is it in dollar terms easily divisible into a monthly dollar cost? Or is it percentage and dollar terms, or only percentage terms?

I cannot remember the last time I purchased a major item such as a home or car or anything that is a percentage, which does not include dollar terms. A common mistake advisors make is not having a clear scripted answer to the question” how much does it cost? “.

To test this point even further, many advisor do not record conversations they have with clients. If you want to have better conversations, record them with the client’s permission. Then let a trusted colleague or coach help you by giving feedback. You cannot learn to play better golf by watching it. You must practice it. By practice, I mean by recording your conversations, playing them back then improving your conversation by having a clear, simple and compelling statement to answer the question ”how much does it cost?”

Listening to you answer the question "how much does it cost," will help you become a better advisor. It will also help your clients see the trust and conviction when you have a simple, yet compelling answer to a very common question. I am not going to give you an answer here, because that is unique to each practice. Each practice may have different company requirements, cost structures, products and services. However, each practice must have a clear and simple, yet compelling answer.

There is lots of simple recording software on your smartphone that you can use to record conversations. One app I found easy to use is Dragon Dictation by Nuance software www.nuance.com. To implement this idea, record three meetings with clients and prospects, then play it back and listen to your answers.

“What should I do when a prospect asks the “HOW MUCH IS IT?” question? No matter how I answer, they never buy.”

The “How Much Is It” question can be a dangerous one for salespeople to handle because there are different scenarios that this question can come up, and each one needs to be responded to a little differently in order to have greater success.

One Popular “How Much Is It?” Scenario:

You are making a cold call to a prospect that has already been contacted numerous times by your firm in the past. After your opening value statement (what you say after “Hello, my name is…”) the prospect cuts you off and asks: “How much is it?”

Now old school sales philosophy will say:

“This is a buying signal. Jump on it!”

But I totally disagree with that line of thinking. I know from first-hand experience that when the “how much is it” question comes up right out of the gate if I give a price, any price, I’m almost certain to hear “Can’t afford it (click)” followed by a dial tone.

So How Should I Respond?

In tough sales situations, sometimes it’s better to list out the things that you DO know, in order to help you respond to a situation that you don’t know how to handle. Bear with me while I make my point.

Here’s what I DO KNOW from my perspective at this point in the sales call:

1. I’m not sure if a need for our solution even exists yet. (They may not need what it is that I have to offer)
2. I have not confirmed this prospect’s role in the decision-making process. (he/she may not even be authorized to say “no”, let alone “yes”)

So knowing that I don’t know these two important details yet, I can quickly realize that getting into a pricing discussion will be nothing more than a shot in the dark. And I don’t like those odds.

A simple response like this has been very successful for me:

“(Prospects name) at this point I’m not asking for you to make a purchasing decision right now. I just wanted to ask you a few questions just to see if what we have to offer would be of any help to you. Would that be OK?”

If you get a “Yes, sure, go ahead” response, great. Go to your next step in the selling process.

BUT WHAT IF I GET A “NO” AND THEY ASK ABOUT THE PRICE AGAIN?

Here are a few choices that have helped me in that scenario:

OPTION 1: Ask “Do you know enough about our product/service that if the price is right, you would be ready to buy/register/order right now?” If the answer is YES, then you have a buying signal and you can move forward. If the answer is NO, then you need to gain permission to ask them a few questions in order to identify a problem as well as qualify them on their role in the decision-making process.

OPTION 2: Say “Depending on a few factors, pricing will be anywhere from (now give a low and a high) but I would need to ask you a few quick questions first in order to get a more accurate number, would that be ok?”

OPTION 3: If you know the price they would have to pay, give it and follow it with a hint at an incentive “The price is $_____ HOWEVER should you decide this is something you truly want, we would do everything possible to not let price stand in the way of us earning your business. I would just need to ask you a few quick questions to make sure what we have to offer would be a good fit for you, would that be ok?”

Now, this doesn’t automatically mean I’m going to cut the price. We can address that once we get to the negotiating phase. Right now, we are just trying to get past the opener phase. Once we legitimately get to the negotiation phase, there are other ways to offer an incentive without cutting the price.

The Other “How much Is It?” Scenario

The other scenario you might hear the prospect ask “how much is it?” is during or at the end of your presentation. This could be a buying signal. Here’s how to find out.

Prospect (in middle/after presentation):

“How much is it?”

Salesperson:

“Let me get that for you – quick question – other than price, is there anything else stopping us from moving forward now?”

If the prospect says “no, if we can agree on the price, we are ready to move forward” or something to that effect, you have a buying signal, and it’s time to close the deal.

You can also ask the question this way:

“Let me get that for you – quick question – if we can agree on pricing,  can we move forward now?”

If your prospect says “yes” you have a true buying signal and it’s time to close.

– Michael Pedone

Michael Pedone teaches outbound sales teams exactly what to say to get sales conversations started with hard-to-reach decision-makers. He is the CEO/FOUNDER of SalesBuzz.com – An online sales training company.

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