Yoho: The Myth of the ‘Price Buyer’

by Kyle Clapham

You just lost a contract to competition. You believe the people were “price buyers,” or “they have a price 20 percent less than yours.” Neither of these statements are factual. If your price was 20 percent higher than someone else, that “someone else” might be 5 or 10 percent higher than a lower-priced competitor.

Fact: There will always be those with lower prices. Your reaction and explanation of a failure to convince prospects to buy from you is all too common.

Fact: Value probably was not established. You may believe that your product is worth the price you quoted; however, what hasn’t been established is its worth in the eyes of your customer.

The Price Buyer

The “price buyer” label, or a competitor having a “better price,” is all too convenient for contractors and salespeople who may not have established value by fulfilling needs. When the components of a product are presented to meet actual needs, you are justifying the price quoted, relating it to the customer’s needs.

Prospects often state wants early on, such as, “We are looking for the best price,” or “Make your presentation brief,” or “We know what we want, so let’s get to the price.” Wants differ from needs, such as quality, ease-of-use, safety, and return on investment.

Once you’ve walked the prospects through a comprehensive need fulfillment presentation, ask questions such as, “Can you see the value of this product installed in this manner?” All the while you are enhancing your presentation with digital images and graphics. And while asking for and receiving confirmations, you may now be prepared to present your price.

Presenting Value

The value of a product or service can only be established after a thorough examination of the prospect’s actual needs. The products and services are then presented to fulfill those needs better than other, similar products. Salespeople often think they are doing a needs assessment when they do a rapid walk-around of the project.

They then eagerly tell the prospect what they have to offer and fail to utilize needs assessment principles. They then blame the prospect for not having the ability to see that the product and service protocols are much better than the competition and, thus, are more valuable.

Critical Judgment Errors

Frequently, a salesperson’s good feelings are dashed when the prospect says something like, “Wow, that’s a lot of money,” or “We’re still going to get a couple more prices.” This may be seen as the price is creating a barrier to getting the sale. Often at this point salespeople make critical judgement errors. (1) Defending the price, stating their company’s quality position, years in the business or its reputation for customer satisfaction. Good idea, but wrong timing.

This should be presented long before the price is quoted. (2) Assuming that something must be done with the price to make it more affordable. (3) Assume there is a strong price objection, identifying the prospect as a price buyer.

When judgment error number (3) occurs, the salesperson often reverts to a discount or “drop” to make the price appear more affordable. (It doesn’t.) If there is an incentive or discount involved with your current sales plan, it has value only when the original price quoted is justified and confirmed. Otherwise, the discounted price is the one the customer is “value evaluating.” When the reluctance to “buy now” is restated, the salesperson may give another “discount,” which simply repeats the earlier process and leads to reduced credibility.

What Did the Customer Say? What Do They Mean?

Why does the prospect state issues that seem like price objections? Abundant research has catalogued 21 different reasons that prospects make statements such as these. Two things become apparent. First, many of these statements are not price objections. They are more often tactics, conditions, signs of interest, or buying methods. Often there are misunderstandings of the components that went into structuring your price. Here the skill of (a) the pause and (b) questions such as, “Why do you say that?” or “How did you come to that conclusion?” will aid the salesperson in qualifying the value of what is being sold.

Is It Price Resistance?

Let’s give these statements their proper name: price resistance. This resistance can become legitimate if the prospect feels they can obtain the same product and quality of service or achieve the same results for less money.

If the prospects haven’t been shown how there is a return on investment or need fulfillment, you can separate yourself from price comparison by offering recommendations that are different from and more personalized than your competition. In this case, your prospects are more likely to compare products or services based on your advice—not your price. Whenever two options appear to be the same to buyers, the decision will almost certainly be made on price.

The Cost of Doing Nothing

To help your prospects see a return on investment, it’s crucial for them to examine their alternatives and the costs of each, especially the cost of “doing nothing.” Although it costs money to buy (take action), in most cases it eventually costs more to do nothing. Prospects need to examine the cost of doing nothing to make better decisions. This calls for an improved “price presentation.”


People rarely buy when they don’t fully understand the value and worth of what you are selling and, worse, they usually won’t tell you when they don’t understand. Misunderstandings often occur because the media or a trusted third party has misinformed them.

If your project is a “big ticket,” remember that most people are often inept at applying mathematics. They rarely examine all the financial aspects of the proposition. Prove the value of your product with charts, graphs and a calculator. These supports can lend you credibility.

An example: If the price difference in your “product” is $10,000 more than a competitor, and if you have determined that they are going to be in their property another 10 or 15 years, when divided over 10 years (120 months), $10,000 may seem like a small investment for quality. Remember, most people bought their home determining its affordability by monthly payments.


Tactics are often categorized as price resistance. They are often utilized by prospects to get a better deal or are a “test” as to the validity of the price and your credibility. Frequently, a prospect will say, “We’ve received a better price.” And this may not be true. While this is a form of deceit, the prospect doesn’t see it that way. When you believe that you are hearing a tactic of price resistance, ignore it. If it is a tactic, often buyers will force you into price justification to gain control of the relationship.

Response to Tactics

Many years ago, we created The Total Offer Concept, a system that responds to price resistance by breaking down the various components of the product and the project. Prospects often identify the quality desired and how other aspects meet their needs. Components such as workers’ compensation, public liability insurance and warranty services that a competitor may not mention (or provide) are common examples. It might seem like a lengthy task. In fact, it can be accomplished on any project in 8 to 10 minutes. Is it worth the time?

Consider the Options



If your prospect perceives the value of your product as higher than the price you present, you have the potential to get an order; but, if the perception is of price being higher than value, you probably won’t. QR

Dave Yoho Associates is the oldest (since 1962), largest and most successful consulting company representing remodeling and home improvement. They maintain a group of account executives and advisers who develop plans, training and execution for large and small home improvement companies, manufacturers, and other service providers. They offer a (no charge) 30-minute confidential consultation. Contact Dave directly at 703.591.2490 or dave@daveyoho.com.

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