When the Prospect’s Mental Budget Is Lower than the Real Cost

Last week, one of my clients called and said that his price had slipped out during a conversation with the prospect, and he realized, after he left, that it was much higher than what the prospect thought it was going to cost to do this work.

How should he go back in and have a further conversation about it? While I gave an answer for him to use, the real issue here is “how to navigate around the prospect’s mental budget.”

We all seem to have budgetary categories that we put things in, especially those things that we are familiar with. If you’re selling a product that people are familiar with, regardless of the actual price, they will put you in to a budget category. If you’re going to be much higher than that category, you’ve got to bring that up upfront, but do it in the context of “the cost of the pain,” not the cost of the solution.

In our sales philosophy, we are oriented to solving problems. In order to know whether problems are worth solving, we have to denominate those problems in some way. That’s the cost of the pain.

If you’re not finding /discovering/leading the prospect through a diagnostic where you determine what the cost of the pain is, then your price will always be compared to “doing nothing.” That’s not a good position for you or for your prospect.

So, as you go through your sales cycle, and you become aware of the types of mental budgets your prospect has, make sure that those budgets are compared to the actual pain – which will be much higher. Then you can talk about your value/price from a position of confidence, not a position of defensiveness.