Written by: LMiller | August 01, 2011
How to Deal with Delusional Buyers Suffering From Sticker Shock
Originally published for RainToday.com
Have you ever talked with a prospect with whom you connected immediately? They called you, sang your praises, acted like they were ready to write the check, but all of a sudden they say, “I’d like to think about it?” And they disappear, never to be heard from again. You’re left scratching your head wondering, “What just happened?”
Between the shock of the recession and the bumpy recovery, that situation occurs a lot. It’s tempting to think that you need to shore up on describing your value or that the prospect is an idiot. (Guilty as charged on the latter one.)
After hearing too many stories (and having a few of my own), here’s my theory: talking about the investment required gave the client a financial wakeup call and they hit the snooze button. Here are two ways to avoid the unpleasant moment when a buyer’s delusions came to light.
What Really Happens
Sticker shock doesn’t come from not describing our value well enough. Most established experts know their own cost/benefit ratio to their clients. It also doesn’t come from not reframing the problem. We’ve become pretty good at defining the client’s reality. The real issue is most folks already have an idea of what they are willing to spend. If your number matches their number, great. If not, they head for the door.
If your quote is bigger than the number in their head, a mental stop sign immediately pops up. Once that happens, the client goes into shock, gets scared, and starts looking for an escape. Or they will agree with you initially and go back and talk to fellow delusional people who agree that you are too expensive. Only to return to you and say, “The timing isn’t right for now. I have to go make some money/ get the budget approved/move Mt. Everest before I can work with you.”
The worst news: the buyer’s number has no relationship with reality. It’s based on what they feel comfortable paying, or on the bargain basement price they saw on the Internet. They are blissfully ignorant of what it really costs to solve their challenge. Your quote was their reality check on what it will take to make their problem go away.
It’s not that your work isn’t valuable or that the buyer doesn’t believe you can improve their condition. The realization that the cure could be worse than the disease is what stops a sales conversation cold.
Cushion the Blow
Your best response is to cushion the blow as early as possible. This is counter-intuitive because many of us believe you establish value first to pave the way for the investment. My experience, however, is that works only with buyers who are open to investing. Folks who are delusional need their bubble burst as soon as possible. Their reaction will tell you if they are a client worth pursuing.
Most buyers want to know what you charge. After explaining what you do and what makes you different, take the initiative and give a heads-up that your services can’t be purchased at the Dollar Store. My favorite phrase: “The investment for one-on-one relationships starts at $XXX.” If it’s too early to quote a specific number or range, use more general terms such as three figures, four figures, five figures, etc.
Then — and this is important — tell them why clients pay. Tell a short story about someone being scared and they invested anyway. Not only does this advanced warning allow prospects to opt out, but you can tell how serious they are by their reaction. If a buyer gulps and says, “Wow, that’s more than I thought. Help me understand what I am getting here,” then you’re talking to someone who is willing to trade short-term pain for long-term gain. That buyer is worth your business case. And you find that out before you spend tons of time trying to sell your services.
Options, Options
If a buyer truly can’t make the number work and you still will want the assignment, you have two options: cut back to lower the price or suggest something different all together. Both are legitimate ways to negotiate without diminishing your value. As one client once told me, “Tiffany’s has diamonds with a wide variety of sizes. But they are all Tiffany Diamonds.”
The key to both strategies is strong boundaries. If you cut the price for reduced services, it is your duty to tell buyers what they are not getting and the ramifications of that. If you suggest something different, you must explain the pros and cons. The conversations you have now can be referred back to when the client wonders why they still need help, or that progress is slower than expected. You can always offer to upgrade the relationship. Clients need to be reminded of what they paid for.
To set up the differences, I use this metaphor — something we all need — food. I will say something like this:
“I just told you the price for the whole loaf of bread. It sounds like you don’t want that much; that’s OK. We can talk about selling you a slice of bread with this caveat: you can’t blame me if you are still hungry. If you come to me disappointed that you didn’t get everything you needed, I will remind you that this project is only a slice of bread. And I’m happy to upgrade the project anytime.”
Conclusion
Most buyers believe in progress and that they are willing to “do whatever it takes.” It’s easy to believe that when you don’t really know what it takes to get to that next level. When you lay out the path that includes the price, you are testing the buyer’s commitment to their cause. Helping buyers learn that they are not willing to pay the price for progress can be the best service you can give them. And when buyers move past their delusions and work with you anyway, they can be your best clients (and referral sources) yet.