How to sell to prospects with the lowest cost isn’t always the cheapest
I’m going to go out on a limb and guess that your reaction to the title of this article is one of 3 things:
- So true!
- I wish I could convince my prospects of that.
- What? That doesn’t make any sense.
A different way of saying it is “penny wise is often pound foolish.” On a funny note, when I was little, this proverb was baffling until I understood that the “pound” that is being referenced is not a weight, but rather a monetary unit.
In business, and in our personal lives, we often come across situations where we go with a cheaper option because we aren’t educated about the purchase or have a momentary lapse in judgment.
Penny-wise is often pound foolish ~ Proverb
Everyone has their own story of money mistakes that cost them more in the end because we were trying to be penny-wise. However, we don’t often win when we are aware of the benefits of a higher-cost item and choose to be pound foolish.
We also come across prospects that make a bad decision and stick with it because “I’ve already dumped this much money into it…” Even when our choices – once provided with more information – are proven to be bad, we will continue making them to save face, to hold out hope, or out of sheer determination.
So how do I get my prospects to stop purchasing based on the lowest price?
The first step is to understand where the prospect’s thinking is, regarding their buying decisions. Your prospect may not have enough information to understand they are spending more than they should in the long term (penny wise, pound foolish) or your prospect is being stubborn in making a new decision because of sunk costs (in for a penny in for a pound).
In for a penny in for a pound
A good question to ask is if they know about your options and how your competitors stack up. If they are responsive, you are dealing with a penny-wise prospect. If they become defensive, you are most likely dealing with a sunk costs prospect.
The next step is to speak to their thinking and their needs. The same message will not work for both prospects.
Penny Wise Prospects
For the “penny wise, pound foolish” prospects, help them understand the amount of money they are wasting every month with a competitor’s solution. Help them understand how quickly their investment will start saving them money in the long term. Don’t forget to factor in non-monetary benefits as well.
Sunk Cost Prospects
For your “in for a penny in for a pound” prospects, the discussion can become a hit to your prospect’s ego if you aren’t careful. The discussion can’t focus on their past decisions but rather focus on how there are now options that are better for them, options that were unavailable (or at least not widely known) at the time of their past decision.
Then, remove the risk-of-change for your prospects. Offer extra training or onboarding to make the transition easy and painless for your prospect.
When you are ready to grow, I can help. Contact me today for a free one-hour consultation. Uncovering areas of opportunity and developing strategies are some of the many things Glover Strategic Marketing can help you achieve. There is no obligation and no pressure, just a frank discussion of your company’s needs and goals. Plus I guarantee it won’t cost you anything to work with Glover Strategic Marketing. So what is holding you back from growing your business?