Beware Price-bergs: What Real Price Keeps Customers from Buying?

By Carroll C. Conklin

Everyone knows what sank the unsinkable Titanic: an iceberg. More specifically, it was the massive ice below the water's surface that ripped a hole in the bottom of the doomed ocean liner.

And as most school children are taught, there's more to an iceberg than meets the eye. What you see above the water's surface represents only about one-ninth of its total mass. Most of the iceberg, and its real danger, exists below the surface.

There's a distinct parallel between an iceberg and what happens every day in the marketplace, and it applies to both consumer and business-to-business selling. Icebergs are out there floating randomly in the North Atlantic Ocean (and elsewhere), drifting silently in the path of unsuspecting ships (though satellites and GPS technology have rendered them considerably less dangerous to trans-oceanic traffic).

The marketplace corollary to icebergs is “pricebergs,” whose threats emerge in any transaction when the price is weighed against “what's in it for me?” Just at the point when you believe that the price is right and genuine value has been established, pricebergs are wait to sink your brilliant sales and marketing efforts (and there is no GPS equivalent to locate them).

And like icebergs, the real danger of pricebergs is to be found in what you can't see.

What lurks beneath the surface?

Pricebergs are real. And their danger (for the seller) comes from the way they inevitably scuttle a pending deal (i.e., “Let me think about it”). And like icebergs, their danger lies unseen beneath the surface of the potential transaction. You think you have a “yes:” it feel right, the prospect is giving you all the right signs.

And then, suddenly and for no obvious reason, the deal goes sour. Or simply drifts away. The prospects, and the opportunity of the moment, are gone without ever letting you know the real reason (and the real price) behind the insurmountable objection.

The secret is understanding your prospect's “real” price. It’s about knowing what's there below the surface. 

The customer's real price almost always has nothing to do with dollars or discounts. Price, as determined by dollars and cents, is only the surface of the cost issue. Potentially more critical to your selling efforts are the three pricing factors that remain submerged and ever-present … and almost always remain invisible and unaddressed during the selling process.

Those unseen pricing factors are time, attention, and risk. Unless your offering addresses and overcomes each of these factors, they will destroy your opportunity to close the deal as surely as that unseen part of an iceberg sent the Titanic to the bottom of the North Atlantic.

Baby Boomers, Gen-Xers and the consumer generations following them (i.e., any consumers born after 1945) invariably value their time, attention and risk more than they value dollars and cents — whether they’re at the mall or on the job. Their reasoning is simple and clear. Money is a more easily renewable resource than time and attention. And risk is such a serious issue because it offers no second chances, a particularly important consideration for today’s buyers, who seek control in all phases of their lives and demand it as consumers. 

So go ahead and slash your price all you want … for all the good it will do you. How often do deep discounts really translate into the sales volume you are looking for? You’re not only de-valuing your brand with discounts, but in most cases your lower price fails to address the prospects’ true and most imminent objections. Likewise if your brand can address those under-the-surface objections adequately, price as an objection shrinks dramatically. 

Bottom line for addressing all of the price-berg: You make more money selling more of your offering more easily.

Here’s how to deal with those under-the-surface objections:

Dealing with time: This is the number one pricing priority with the majority of today’s consumers. With so many demands on the consumer’s time, is your offering just another one? Or is your offering something that makes a prospect’s time more valuable? It goes back to understanding your prospects’ values thoroughly. When you know what they value most and why, you’ll know where they prefer to invest their time, and how your offering most conveniently attaches to those preferences. If you don’t know and align with those preferences, then you’re just another commodity, begging to be ignored.

Dealing with attention: Today’s consumers are attention-greedy. That characteristic applies to B2B buyers as well as everyday shoppers. Regardless of what you are selling – a product, a service, yourself – you have only a fraction of a second to earn that attention, which is yours only as long as you can hold it. Again, knowing and appealing your prospects’ values is essential to winning their attention, and vital to earning their purchase decision. Without that attention, they won’t “buy” you or what you’re offering. Without an offering that is driven by values they recognize and identify with, they won’t have any attention to share with you. Just because you think they are paying attention – or worse yet, think they’ll pay attention because they should – doesn’t mean they are paying attention,

Dealing with risk: Even when you’ve earned your prospects’ time and attention, you haven’t earned the sale (even if it feels as if you have) until and unless your offering nullifies their anticipation of potential risk. Zero risk is ideal and achieving it is extremely rare with today’s consumers, the most sophisticated and cynical that the marketplace has ever known. Promising no risk is no longer enough (“Try it for 30 days – risk free!”), and not all that believable. As consumers, our expectation of risk generally cannot be promised away. What mitigates risk most effectively is knowing the person or brand on the selling end of the transaction. If I feel as if I know you, the risk factor drops dramatically. If I don’t know you (or your brand), I’m going to trust my own sense of risk more than I will trust you.

In that case, the price-berg prevails, buoyed by the mass of risk that serves as its uncompromising ballast. And no discount will keep it from sinking the sale.