Selling isn’t always easy. Quite often, and especially if your product or service has various options at different prices, you won’t be able to offer a price that’s immediately accepted.
You might well have to enter into some elements of negotiation to find a point that works for you and the prospect. But how do you get there? How do you avoid giving away too many concessions and therefore losing revenue?
That’s where the idea of top down selling comes in; an approach that enables you to gradually reduce the overall price without compromising the whole deal.
The starting point is to offer the highest price available and then, step by step, remove elements to finally arrive at a price that you and your prospect are both happy with.
It’s an approach that most commonly used with products or services that have a variety of tiered options. If you’ve ever gone to buy a car, more often than not you’ll be offered the highest specification version of whatever model you’ve opted to consider. Then, because the price is too high for you, you’ll start to remove specific features that you don’t think are important to you as a way of reducing the overall price.
Ultimately, the sales person will show you a particular model that has the features you want at a price you’re happy to pay. You’ve got what you wanted and the sales person has maximised the value of the sale, without ever being as blunt as asking you what your budget is.
But what does that mean to you if you’re selling products or services with multiple options?
1. Start by offering the most expensive option.
You have to start with the piece de resistance. Show your prospect the package that contains every possible option i.e. the one with the highest price tag. If you’re selling high end cars, you show the fully-loaded model first.
Let them see the top end option, at the highest possible price point before you start to negotiate particular options out of the deal. All being well, your prospect will be excited by everything that’s available, even if it’s outside of their budget range. They might even see aspects that they wouldn’t have previously considered having and they might even decide that this is the exact thing they really want … And you haven’t had to negotiate downwards.
2. Focus on value, not your price.
Your absolute priority in any sales opportunity is to demonstrate real value rather than relying on haggling. Each person’s definition and perception of value is unique to them so it’s important to help the prospect make a decision that’s based on the value they believe you can provide.
Doing this effectively requires patience and strong communication skills. When you show the all encompassing, top range option of your product, take care to communicate the real value that it will provide your prospect. To do this you need to have at least a basic understanding of what’s important to them and that’s where your questioning skills come in play.
For example, if you sell software to small business owners who don’t believe they have the time to learn a new product like yours on their own, you could promote the value of your training programmes as a way of speeding up the implementation process.
The key is to avoid selling on price … Sell on value. If all you do is pitch a high end price and then haggle down without taking the time to justify the initial high price, you’ll almost certainly fail.
3. Negotiate down slowly.
After you’ve tried to promote the top end version of your product, take small steps as you remove small elements that are less important to them and make sure they’re fully engaged in the process.
Top down selling is fundamentally based on negotiation. Encourage them to explain which features they think are important to them, explore the possibility that they might actually like more, and ultimately you’re more likely to reach a compromise that works for you both.
Active and careful listening is crucial, as is constantly trying to gauge how they’re feeling and selling with genuine empathy.
Arriving at the right price point may require giving some concessions, but don’t rush into giving them away or refusing to offer them at all.
The end goal is to reach a point that works for both of you. Do that and you’ll close the sale and have a happy customer who might just be prepared to talk about their positive experience to other prospects.
If you sell a product or service with tiered options, it’s absolutely essential that you understand the concept of top down selling and how to employ it effectively.
If you’re still struggling, then perhaps we can help.
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