As a business owner, you’ve heard this phrase hundreds, if not thousands of times from potential customers.
How do you usually respond to this question? Before you answer, you should first understand what that potential customer is really asking you.
When they ask “How much”, what they are really asking you is “What will I gain if I buy this product?”
There are a few things you need to understand about this loaded question that will help you to formulate a response that will help turn them from skeptical potential customer, to paying customer.
How much something costs is relative
When someone inquires about price, they are comparing it to something else, something relative that they understand.
Example; they are inquiring about hiring you, an accountant, to do their family tax preparations. In the past, they have used a low cost tax preparation franchise which they were moderately satisfied with.
See what can potentially happen here? If you only quote a price, they will compare that price to their previous experience (low cost tax franchise service) and assume you provide something similar, because they have nothing else to compare you to.
How to fix this
Ask the potential customer, “Have you ever used a tax preparation service before, and if so, who?”
Based on the response, you will immediately understand what you are being compared to and will now have a chance to highlight your differences and competitive advantage. It’s important to understand your competition and know their flaws so you can highlight your advantages over them in a way that, at the same time, does not disparage them.
They want to know the value they will receive for that price
If I asked you “Is 20K too much to pay for a car?”, what would you say? Of course, the obvious response would be “What kind of car?” At this price point a 5 year old Honda Civic would be a rip off, while a brand new Range Rover would be steal.
Most people that walk into your business for the first time have no idea what you do or what kind of value you provide. You can’t leave it up to them to make that determination, it’s up to you to show them why they need your products or services.
How to fix this
Ask the customer, “Have you ever been here before or used our services?” If the answer is no, you can say “Well welcome, let me tell you a little about what we offer” Give them your value proposition, help them to understand how better off they will be if they decide to do business with you.
It’s all about showing them the value
They don’t want you to dodge the question
While you should almost never just quote a price without first demonstrating what you do and what value you have to add, you should also never dodge the price question. That’s what used car salesman do and it drives people nuts.
Make sure you answer the price question, but only after you are able to find out a little more from the potential customer and can give your value proposition.
How to fix this
When someone asks you “How much?”, tell them, “I’d be happy to give you our pricing…..in order to make sure i’m giving you accurate information, can I just ask you a few brief questions?” If you let them know right off that bat that you will be answering the price question, and not dodging it, most of the time they will give you a minute to speak. This is your “in” and you should use it to ask a few qualifying questions in order to deliver them that value packed response.
As you can see, they key to answering the “How much?” question is finding out more about the potential customer and having the opportunity to give your value proposition. You want to do this in a way that is not rude, is brief, and lets them know that you are not trying to dodge their price question.
For most business owners and salespeople this is too much work. Most of the time they will quote a price with the attitude of “If they want us, they know where to find us”. This is the reason most people are so blunt with the “How much?” question in the first place, they are used to being treated in a blunt manner.
Take that extra time to ask questions, formulate a response and show the value you have to offer. You may find that you’ll be able to turn some of those blunt price questions into a valuable customer relationships.