Poka-Yoke and how much does it cost?
Poka-Yoke in Japanese means "mistake proofing". It originated with the term Baka-Yoke ("idiot proofing") which was eliminated for obvious reasons and because smart people make mistakes too.
Some examples of Poka-Yoke are: You can't shift into any gear without pressing the brake pedal. Or, you can't take the key out of the ignition unless the car is in park.
What does this have to do with "how much does it cost"?
A lot, especially if this is the first question you are asked after presenting your product or service. Buyers have a natural tendency to protect their wallets. It is an instinctive reaction whenever someone is after “my money”. Some sales experts will tell you that the question is a good sign: it shows that they are interested.
Not really. It is an instinct, a defensive mechanism, and more often than not it will result in, “I can’t afford it”. If you present a product or service and this is the initial reaction you get, you’ve given a poor presentation. As a matter of fact, the sale is probably already lost.
You need to think Poka-Yoke: How did I put myself in this defensive mode and what can I do to ensure (mistake proof) I don't repeat it?
You can imagine the number of crashes before Poka-Yoke and the requirement to press the brake pedal before you shift. If you don't want to sales-crash you need to understand the behavior that lead you to hear this dreaded question.
When the question is asked up front, you have failed and will find yourself spending too much time defending whatever answer you gave. Is this the end? Not at all. Recognize that you missed the point and ask a straightforward and honest question: “Have I done a good job explaining why I believe this XXX provides a good solution for you?” (obviously not but this is a graceful way to recover).
Regroup, apologize and get to the point by first asking a few questions (as opposed to selling of course) that identify what problem you have to solve for your prospect.
But what if the question is asked at the end of your presentation? Then, and only then, it is a promising question. If I wasn’t interested why would they care how much it costs? You’re likely going to face “I have to think about it”, “Oh, that’s too much”, or “ I can’t afford it”. Those are good answers and a basis to dig deeper. After all, no one will just hand you their wallet. We wish it was that easy.
The most important step you must take is to ascertain that you have done a good job identifying the prospect’s need and that your offer resolves it.
How do you answer this question? Move the prospect away from what is trivial (cost) to focusing on value - the value she gets is bigger than the investment she needs to make.
If your service costs $1,500, it may seem too high. If you illustrate that a $1,500 investment will yield $5,000 in top-line revenue or profits, then you’ve refocused your prospect to what should matter the most, the return on investment.
Remember, not all ROI is obvious. If your product generates productivity savings, it may not appear that you are saving the customer money. Every aspect of a company's operation has a dollar value. If your customer isn't measuring it, help her identify it and prove your ROI.
If your sales team is spending too much time shuffling paperwork and entering data, an automated sales system will free their time to focus on sales. You should see more activity, higher conversion and increased sales and profits. Now that is true ROI.
Identifying pain, addressing solutions and presenting value neutralizes the natural tendency to talk about price. There are many options to consider like payment plans, delayed payments etc. This part of the negotiation is easier because the adversarial element is out of the equation. You solve a problem, provide real value and someone is willing to pay you for it.