Clients with a keen eye for a bargain may be tempted to ask if they can receive a cut in the cost of your advice, and such requests are not uncommon in some fields.
So, how do you respond as a financial adviser? Following on from his recent article on how to deal with clients seeking second opinions, KnowledgeMaster’s Jim Prigg encourages advisers to answer that question directly.
He offers some useful responses which redirect the ‘discount’ thinking towards seeing the value of advice as more than just dollars on a page.
Clients seeking a cheaper price is not an unusual part of a sales process, and in the July edition of the Riskinfo e-magazine I covered how to respond when people want to look elsewhere for a second opinion.
What do you do then with this scenario? “I’ve talked with someone who said they will charge me less for what you are doing. Can you do that for me?” Or “I can get life insurance cheaper online!”
What do you say? How do you react?
People naturally look for lower costs and discounts. That is a part of the process when you put your experience, expertise, services and ideas up for sale. It is also part of some people’s nature to want to get the best price for everything all the time. Haggling is not a new phenomenon when it comes to the sales process!
Be ready for the question of discounts/lower costs with a range of ways to handle the request without losing your cool or losing sight of your clients need to engage with your advice and the degree of urgency to make a decision too.
Consider the following:
- Are there serial offenders in your industry who drop their charges, and why do they do so?
- Are there certain types of clients who will ask for a lower price??
- Are there certain times of the year when discounting is more prevalent?
- Have you or your people been trained to handle the issue of charging a lower price for advice?
- Are there some parts of your service proposition that can be discounted?
- What is the best defence for your business against requests for discounting?
At the heart of the discount question are the three following critical points:
- If you do reduce the cost of your advice then it should be to secure new business or a commitment to engage with your advice.
- If you do reduce the cost of your advice, will the nett price of your services (including the insurance product), be in profit or deficit for having done so?
Below are some ways to answer this objection. It is recommended that you use these as guide. Introduce your own words, terminologies and expressions into these answers.
- Mr Smith, why didn’t you act on their advice? You probably didn’t do so because you know that you only get what you pay for. The only way anyone can discount the offer is to discount the end benefits.
- If I do reduce the cost of my advice, will you take it??
- What were they discounting? Was it price only, premiums, benefits, features or their own service?
- What part of my service and the insurer’s would you like me to take out to reduce the cost of my advice?
- If there were a less expensive way to provide this advice and insurance cover I would be placing that before you, instead of this offer.
- Would you trust a doctor, dentist or accountant who freely reduce the cost of their advice whenever someone asked for them? We are professionals and we don’t discount on price because that compromises on the service and value our clients demand.
- We have provided advice to more than (insert your relevant numbers here) clients over the last 12 months and not one of them received a discount. Would you like to discover why they that is the case?
- “The bitter taste of shoddy product or bad service lives on long after the short sweetness of discounting on service and quality.”
As part of what you do it would be of great value to workshop this discount objection for your own business and your particular industry.
- Which of these are you utilising?
- Which of these could you implement?
- Which of these could you improve on?
This article is reprinted with permission from Jim Prigg CEO and founder of Knowledgemaster Pty Ltd. Knowledgemaster is an online resources company that delivers practical communications, interaction, sales and soft skills tips, tactics, techniques. Learn more about winning business programs and courses by contacting Jim.
Contact Jim Prigg to learn more about winning business programs and courses.