How to respond to sticker shock

I believe it was that master salesman (and sometime CEO) Lee Iacocca who coined the term “sticker shock,” back when he was trying to save Chrysler in the early 1980s. At the time, inflation was running in the neighborhood of 10% a year. So a buyer who hadn’t been in a showroom for a few years would find prices had jumped almost 50%.

Did buyers blame the lousy economy? Did they recognize that those increases were almost entirely caused by inflation? Did they care that Detroit was losing money on every car it sold?

No. They blamed greedy automakers. They said, “Your prices are too high.”

While we’re not facing runaway inflation today (at least not yet), salespeople still have to deal with sticker shock. And the fundamental problem is still the same: When your fair price causes customers to faint, it means they misunderstand the value proposition.

Maybe their expectations were set by what they paid last time. Maybe they saw a competitor’s come-on ad and didn’t read the fine print. Maybe they forgot about after-sales service. Maybe they think they’re still living in 1981.

The point is, most customers DON’T understand your value proposition as well as you do. In a perfect world they’d spend as many 12-hour days as it took to know your product. They’d pore over the materials you send them. They’d track down all your customers who gave testimonials and grill them about their relationship with you. But the reality is that they’re busy people, and the purchase of your product or service is just one of many things they’re thinking about on any given day.

So when you hear, “Your price is too high,” recognize it for what it is: a signal that you must work harder to communicate your value proposition.