Sales Psych Lesson 1: The Gasp Pricing Model

[Winchester]

Sometime later this week I will be releasing a transcribed version of a phone call and sales meeting I had with a client to sell them SEO; this is in follow up to my thread:

http://www.blackhatworld.com/blackhat-seo/offline-marketing/402212-so-youve-got-your-first-meeting-simple-sales-guide.html

But before that I wanted to share some short sales and psych tips with you guys.

The first one is simple and straightforward and I call it "Gasp Pricing".

During the meeting watch the client careful when you tell them the price. Most people when hearing a high price will breathe in deeply - close to a gasp, ideally you are looking for someone to do one of these micro-gasps, pause for two seconds and say something afirming like "ok" "fair enough" "sounds good" even a clenched smile or nod will do.

If the person doesn't gasp before agreeing your price is low, you could have gotten away with a slightly increased price point, take note of this for any future re-negotiation of contracts, as well as similar sized businesses in similar sectors.

If the person's pause lasts longer than two seconds before any signs of affirmation, or looks to anyone else in the room who is NOT a decision maker, then you have just barely squeaked by and you want to be careful in the future with your pricing.

If the person gasps, but doesn't affirm chances are they aren't a fan of the price - you may not have lost them but now will be in a waiting game, and you should consider if you are the person who competes on price or the premium product as the client will likely attempt to negotiate.

While this may not to quickly spin the tables in a single meeting this guide is a great learning tool that will help you better gauge client pricing in the future as well as optimize your contract negotiations with each client.

Best of luck!

 

[boom1]

had a couple of gasps recently

 

[Strygwyr]

Nice post Winchester. I just graduated with a degree in psychology so I'm looking forward to reading the rest of these. One of the courses I took was a psychology of media and persuasion class.

This post is sort of in line with one of the more basic persuasion techniques: the "Door-in-the-Face" technique which is basically when a persuader makes a large request that is almost certain to be denied. After that, drop down to a smaller request. In comparison, the smaller request is going to look THAT much more reasonable when compared to the initial request. There are a number of other social theories as to why this technique is effective (and when and how to apply it) but I won't hijack your thread.

Anyway, if you think the gasp was too big and they aren't likely going to accept it, that might be a good time to put this into play if you have room to adjust your prices.

Look forward to the next lessons.

 

[Virus1]

Reading body language and facial expressions is the key to face to face selling.

And about price....NEVER ...NEVER be afraid to be the highest bidder or to give a high price.
If they do not want to pay the higher price.. then lower it a bit... and add more value by throwing in other services that cost you pennies.

Also... do not give a price right away..
talk to them... bond with them...
know their problem.... present the solution... let them fall in love with the solution...
and emphasize how easy life will be for them once the solution is set in motion.

Then... give them the price.

Even if you are a bit high.... you already sold them on the "sizzle".... and they will buy.

After the sale.... deliver the product and more.
Make sure they do not regret buying from you.

and they will send you more business.

 

[Winchester]

It's good to see you get the idea Virus, don't be afraid to be the premium product!

Sure I cost more than the other guys but that's because I properly and confidently solve your problem better than anyone else. You want your problem solved not patched.

@Strygwyr The door in the face technique is a great school theory - I'd never use it in the real world as I want to maintain brand supremacy when I walk in that office. We negotiate price once it's been thrown out there. It is what it is. If you are someone that competes on price door inf ace can work but it can also look like you are floundering for business so be careful

 

[khanna_rohit]

lets hope things work out.

 

[Strygwyr]

@Strygwyr The door in the face technique is a great school theory - I'd never use it in the real world as I want to maintain brand supremacy when I walk in that office. We negotiate price once it's been thrown out there. It is what it is. If you are someone that competes on price door inf ace can work but it can also look like you are floundering for business so be careful

Good point and very true That's what I meant by going into when to use it, and how to use it if you're going to. It all depends on how you want to go about it and the type of person you're dealing with - many factors at play. Like you say, it could look like you are floundering for business, but used on the right person in the right context and played off in the right way, it could look like you are being considerate and reasonable. Play it off as a favor for instance.

I certainly wouldn't use it on a business person who knows their stuff, but an elderly couple who runs the flower shop downtown... maybe .

 

[Winchester]

Good point and very true That's what I meant by going into when to use it, and how to use it if you're going to. It all depends on how you want to go about it and the type of person you're dealing with - many factors at play. Like you say, it could look like you are floundering for business, but used on the right person in the right context and played off in the right way, it could look like you are being considerate and reasonable. Play it off as a favor for instance.

Fair enough - favors can be good for retaining customers you have a long standing relationship with; I wouldn't bring it to the client too much to start otherwise they will expect way more in the long run. Ultimately you should be able to confidently tell them you are able to solve their problem, then over deliver.

 

[sanjeev2010]

Ha ha, this is perfect timing as I've got my first meeting with a client next week or so.

Keep the tips coming!

 

[AdisLCS]

as usual another great thread Winchester. Facial and body expressions are great way of testing the waters and the comfort level.

We take into consideration the value provided to the client and his/her customer value when setting prices. I tell my sales guys never to give discounts. What we do is reduce services. And use consultative sales techniques, never over promise results but rather promise less than we know can be achieved. Also I have something similar to door-in-your-face". On other hand, one of my member sites I have two paid plans, one for $149/year, another for $997/month. Since implementing the high end side by side conversion rates for the lower end have doubled. It also helps minimize expectations for the lower end subscribers.

Can't wait to hear the conversation and see follow up posts. Great work Winchester and thank you again for sharing your real life experience and skills with us.

 

[theag]

Sometime later this week I will be releasing a transcribed version of a phone call and sales meeting I had with a client to sell them SEO; this is in follow up to my thread:

But before that I wanted to share some short sales and psych tips with you guys.

The first one is simple and straightforward and I call it "Gasp Pricing".

During the meeting watch the client careful when you tell them the price. Most people when hearing a high price will breathe in deeply - close to a gasp, ideally you are looking for someone to do one of these micro-gasps, pause for two seconds and say something afirming like "ok" "fair enough" "sounds good" even a clenched smile or nod will do.

If the person doesn't gasp before agreeing your price is low, you could have gotten away with a slightly increased price point, take note of this for any future re-negotiation of contracts, as well as similar sized businesses in similar sectors.

If the person's pause lasts longer than two seconds before any signs of affirmation, or looks to anyone else in the room who is NOT a decision maker, then you have just barely squeaked by and you want to be careful in the future with your pricing.

If the person gasps, but doesn't affirm chances are they aren't a fan of the price - you may not have lost them but now will be in a waiting game, and you should consider if you are the person who competes on price or the premium product as the client will likely attempt to negotiate.

While this may not to quickly spin the tables in a single meeting this guide is a great learning tool that will help you better gauge client pricing in the future as well as optimize your contract negotiations with each client.

Best of luck!

do you have any good suggestions for resources like books etc that cover the psychology part of this business?

 

[Winchester]

as usual another great thread Winchester. Facial and body expressions are great way of testing the waters and the comfort level.

We take into consideration the value provided to the client and his/her customer value when setting prices. I tell my sales guys never to give discounts. What we do is reduce services. And use consultative sales techniques, never over promise results but rather promise less than we know can be achieved. Also I have something similar to door-in-your-face". On other hand, one of my membersites I have two paid plans, one for $149/year, another for $997/month. Since implementing the high end side by side conversion rates for the lower end have doubled. It also helps minimize expectations for the lower end subscribers.

BTW "gasp pricing" don't seem to be trademarked. Should you ever decide to write books, give seminars I'll jump right on board.

Can't wait to hear the conversation and see follow up posts. Great work Winchester and thank you again for sharing your real life experience and skills with us.

A very valid point, selling on scheme (a term for multiple plans) often can increase the lower end plan as many people think they are getting a deal or a sample of the high quality content that they were curious about. It works great in that particular model - I would avoid that in the boardroom unless your goal is to sell mostly the low end product.

Also I am in the process of writing a book but that is more than likely a year down the line, as for seminars maybe its something I'll look into.

@theag - There aren't many sources out there on this topic, at least very few I've encountered, most of it is a new work and applied psych knowledge; I do have a blog (although I won't push that here) it touches on topics like this and brand marketing. If you search around I'm sure you could find other similar small blogs, papers and minor websites.

 

[Frostedbutts]

These are great threads Winchester, please keep it up. I've been meaning to post in your Sales thread, but I think that thread helped land me a $1200 client.

He gasped at the price a bit, and then sat there looking down clearly in deep thought and I just let him sit there. Must have been the longest silence of my life sitting through that, and he eventually looked up and said "alright, fair enough". This stuff works!

 

[skinnyboi]

Sometime later this week I will be releasing a transcribed version of a phone call and sales meeting I had with a client to sell them SEO; this is in follow up to my thread

wow cant wait

 

[theag]

wow cant wait

yes definitely looking forward to that! thanks winchester

 

[singingsleep]

I have noticed SOMETHING like this going on with clients and I have been trying to work out price points, this is extremely helpful as usual Winchester, thanks!

 

[dankerman666]

I have actually had the luck of customers offering me monthly payments that were double what I was going to propose. Kinda just let them talk their way into it I guess LOL.

You are a good man for giving these guys such a wonderful training course Winchester.

Mad kudos

 

[walandio]

wow very nice read.. this will be good in negotiating with offline clients..

 

[Winchester]

Glad to see it's worked for you guys next one should be out mid-march!