Why Buyers Think Your Price Is Too High

By Paul Reilly

There is a legendary tale about Pablo Picasso selling a sketch. Picasso was sitting at a café and sketched a bird on a napkin. He finished his coffee, crumpled up the sketch, and was getting ready to throw it away. Before he could throw away the sketch, a woman approached him. The woman asked for the napkin and was willing to pay for it. Picasso told her the price, which was the equivalent of $20,000. The woman obviously experienced sticker shock and said “But it only took a couple of minutes to draw that picture.” Picasso said in response, “No. It took me my entire life.”

Picasso’s two-minute masterpiece was created through a lifetime of practicing, learning, suffering, and failing. However, the woman only saw a two-minute effort.

Your bundled package is similar to Picasso’s drawing in that the buyer doesn’t see everything that went into the creation of your value-added solution. Your current solution includes your organization’s previous effort, innovation, and continuous improvement. Your value-added solution is the result of years of struggle, growth, and enhancement. Instead of discounting your solution, which has taken years or decades to create, educate the buyer.

Your buyers are also similar to the woman in the story. Buyers are presented with the most current version of your solution, but are often oblivious to the effort, struggle, and ingenuity that has led to the creation of your current version. Their lack of awareness causes them to question your price. Based on the effort they see, buyers don’t believe the exchange is fair. This lack of fairness is the number-one reason buyers object on price. When buyers perceive an equity gap, they resist on price. Salespeople need to follow Picasso’s approach and educate the buyer.

It’s important that buyers are aware of the value you deliver throughout their buying process. But it’s equally important that they understand the effort behind the value. Buyers go through three phases when they buy and experience your solution: pre-sale phase, transaction phase, and post-sale usage phase. Explain, in detail, the value added you deliver at each phase. Make the buyer aware of the value and the effort behind the value. The more visible your effort, the more equitable the exchange. When buyers are more aware of the effort, they’re less likely to object on price.

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2018-03-29T16:13:53+00:00