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Should I Use a Pricing Increase to Create Urgency to Buy?

This question comes from a young, sales rock star in the heart of the Midwest. She writes: “What is the appropriate way to apply deadlines in a pricing situation?” This question is about how to create urgency on the part of the buyer, and it’s an important question.

Here are some things to consider.

Read the Answer Here! One Day Only!

The idea behind the urgency here is well established and well documented. If you want to understand it, look no further than the masterwork on persuasion, Robert Cialdini’s Influence: The Psychology of Persuasion.

What underlies the pricing deadline, what makes it work, is a concept called scarcity. It’s the idea that if you don’t buy now, the offer will go away and you will never get another chance to obtain was offered at that same price.

The picks and shovels gang out here on the Internet, the people who sell you the “How to Succeed on the Internet” programs and packages, use every method Cialdini outlines in Influence, including scarcity. They use them because they are powerful and because they work.

For most of us in sales, however, it’s not quite so easy.

That Trust Thing

For most of us in business-to-business sales, we can’t easily use some of the concepts and tools that marketers and business-to-consumer organization can use. In order for scarcity to work, the idea that the offer will not be made available later, isn’t very compelling to your prospective clients for a couple of reasons.

First, are you really being honest when you tell your prospective clients that the price that you are offering them will not be available if they were to accept it a few days after your offer expires? I don’t believe most business-to-business sales organizations really intend to withhold the price offered, and I believe buyers know this.

If there isn’t some compelling, logical reason that your price would be going up at some future time, then it feels dishonest. It feels manipulative. It feels like the deal is about you, about your needs, and about your timing—not your dream client’s. This works against your longer-term goals, which include a relationship built on trust and the value that you create. (If there is a real and valid reason your price will be increased, then that is something different.)

Also, scarcity doesn’t create a lot of urgency if there are many people who sell what you sell and you are unable to differentiate your offering. If what you sell isn’t really scarce, it’s hard for buyers to believe they can’t find someone else who is willing to help them obtain the outcome they need. (However, if you are special, you may have this power even in a crowded and commoditized market).

How to Create Urgency

The reasons a salesperson or a sales organization feel the need to resort to tactics to compress their sales cycle are many. But tactics rarely offer the kind of improvement that you can obtain by working on the fundamentals of good salesmanship.

There are more compelling and more honest ways to create urgency. To create the urgency you need to move your client, you need to show them what is costing them to not move on your offer sooner. You need to show them the improvement that could be getting now, and what that improvement would mean to their business.

What is costing the business to not adopt your solution now? How much will it cost them over time, say the next 30 days? How would they benefit by adopting your solution now instead of later?

Sometimes, there are sales process issues that cause your deal to stall, too. There are, of course, questions you can ask and answer to determine what the obstacles might be.

Does your client have concealed or unresolved concerns that you need to address? Did you identify the power sponsors, or are there other people you need to get agreement from to move the deal forward? What fears or concerns do they have that you have left unresolved?

It is easier to attempt to create a sense of urgency through pricing. Easier, but not effective. If pricing isn’t what is preventing your buyer from buying—if it isn’t their motivation—then it is weak, ineffective, and it can violate trust.

Questions

How do you create urgency on the part of your buyers?

Why do some tactical approaches work against your long-term goals?

When are tactical approaches effective?

Do you really intend to not honor the price if your dream client decides on a different timetable than the one you need or prefer?

Is your threat really all that frightening as to create urgency?


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Comments

comments

  • http://womeninbusinessradio.com Michele Price

    How do you create urgency in an online offer without using the scarcity BS anyway.  As you do not have access to the ability to answer or ask questions concerning what it is costing them.  Here is my experience in f2f many times buyers do not know what their lifetime value is of a customer so even when you ask what is it costing you to not get this solution, then cannot answer in their own heads.

    • http://www.thesalesblog.com S. Anthony Iannarino

      You have to help them calculate the lifetime value, Michele! 

  • http://twitter.com/CoachLee Leanne HoaglandSmith

    By establishing ROI up front, can expedite the urgency buying criteria. The greatest competitor we all share is the “status quo” or getting people to move off the dime. My Dad always said price was the fourth objection and followed You, Your Company and Your Solution.  If there is push back on pricing, it may suggest that the potential customer did not buy you, your company or your solution.  Again a great posting. Thank you,

    Leanne Hoagland-Smith
    Author of Be the Red jacket

  • CS Sales Guy

    Spot On!!  Using pricing to create urgency only hurts you in the long run.  For all the reasons you mentioned and also because they know now that you will drop your price whenever they delay or when the end of quarter comes.  One of the things that drives me the most crazy is when sales leadership continues to reinforce this mindset and “urgency” with customers because they have artificial timelines as well.

    • http://www.thesalesblog.com S. Anthony Iannarino

      Slave to the quarter, CS Sales Guy. Short term thinking instead of the long view is a recipe for bad behavior and bad long term results. 

  • agentmattdionne

    I think it depends on the situation and the industry that you are in. For example I’m in P&C insurance sales. knowing that Hurricane Irene did serious damage along the east coast, I let my  potential clients know that insurance rates would more than likely fluctuate the longer they waited to make a decision.

    • http://www.thesalesblog.com S. Anthony Iannarino

      That’s not deceptive, Matt. That’s helping them make an informed decision. The rates will most likely increase, and they may benefit from buying now. 

  • Paul Crafer

    Urgency has its own section in the sales training manual of à company i used to work for and we lived and died by its sword, me more than most. ‘Do you want à comms check this month or when the customer feels like buying?’ was the rationalisation behind it. Urgency is valid when Genuine, otherwise its just deception, not justifiable, not something everyone does, just deception (though i doubt anyone reading this post would be that type of seller).
    Another stimulating post, thx Anthony.

    • http://www.thesalesblog.com S. Anthony Iannarino

      I agree, Paul. I think when it is legitimate, it is legitimate. You may actually be helping your client to push them to act with urgency. When it’s deceptive, it’s a bad idea. 

  • http://www.ricksegel.com Rick Segel

    Great article and some things to think about! Customers have more choices than ever before so businesses have to be careful with price adjustments to create urgency. Think about your long term goals  – Is this in line with them?

    • http://www.thesalesblog.com S. Anthony Iannarino

      That’s critical, Rick. We want a long term, lifetime client–not a transaction. Act accordingly. 



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