Strategies for Inflatable Manufacturers and Renters
When a customer says “this is more than I expected to pay” or directly asks “how much does it cost?”, many inflatable business owners find themselves at a crossroads. After all, how do you respond without losing your profit margin or devaluing your product? In this article, we will explore effective strategies to handle these objections, increase the average order size, and maintain the value of your service.
Why Responding Directly to Price or Objection Can Be Dangerous
Before diving into the solutions, it’s crucial to understand why responding directly to price or cost objections can be a mistake:
- Margin Reduction: Responding with an immediate discount can reduce your profit margin.
- Product Devaluation: Easily granting discounts can make the customer question the real value of your service.
- Loss of Conversation Control: Responding directly to the objection or price takes away the opportunity to explore the customer’s needs and present the value of your product.
Tip: Avoid reducing the price or responding directly to the cost. Instead, use strategies to maintain your product’s value and increase the order size.
1. Understand the Concept of the “Endowment Effect”
The Endowment Effect is a psychological concept that shows people value something more once they mentally own it. For example, if you present a list of items or services, the customer starts to feel ownership of those items, making it harder for them to remove them.
Example:
If you offer a list of inflatable toys and additional services, such as setup and security staff, and say to the customer: “Please remove the items you don’t want,” they will have difficulty doing so because they already consider those items as “theirs.”
Tip: Use this effect to your advantage to increase the average order size.
2. Present a List of Items and Ask the Customer to Remove What They Don’t Want
When the customer says the price is higher than expected, instead of reducing the price, present a list of items and ask them to remove what they don’t want.
Example:
“Understood, the price may seem high at first, but let’s adjust. Please remove the items you don’t need, and we’ll recalculate the price.”
Tip: This makes it difficult for the customer to remove items because they already consider them as “theirs.”
3. Provide a Price Range Instead of a Fixed Price
When the customer asks for the price, instead of giving a fixed value, offer a range. This allows you to maintain control of the conversation and continue qualifying the customer.
Example:
“The price can vary between $100 and $1,000, depending on what you’re looking for. We can discuss your specific needs and adjust the price accordingly.”
Tip: This shifts the responsibility of defining the price to the customer while you continue to explore their needs.
4. Ask About the Customer’s Needs
After providing the price range, ask about the customer’s needs. This allows you to qualify the customer and present the value of your product.
Example:
“So, what are you looking for? Do you need an inflatable toy for a corporate event or a children’s party?”
Tip: This helps direct the conversation toward the customer’s needs rather than focusing solely on the price.
5. Present Different Package Options
If the customer is interested, present different package options. This allows the customer to choose what best fits their budget and needs.
Example:
“We have three package options: the basic, which includes one inflatable toy and a setup team; the intermediate, which includes two toys and a specialized team; and the premium, which includes three toys, a specialized team, and a supervisor to ensure everything runs smoothly. Which of these packages do you think fits your budget best?”
Tip: This shows you’re willing to work with the customer without compromising your product’s value.
6. Use the “Upselling” Technique
During the conversation, use the “upselling” technique to offer additional services that may increase the perceived value for the customer.
Example:
“In addition to the inflatable toy, we can offer a security team to ensure everything runs smoothly. This is something many customers value, especially for corporate events.”
Tip: This adds value to your product without increasing the initially presented price.
7. Share Success Stories
If possible, share success stories or testimonials from satisfied customers. This helps build trust and justify the price.
Example:
“Recently, we did an event for a company that needed inflatable toys for 500 guests. They were very satisfied with the service and have already hired us for other events.”
Tip: This shows you have experience and that your product or service truly adds value.
8. Ask What the Customer Is Willing to Spend
If the conversation is going well, you can directly ask what the customer is willing to spend. This helps adjust the offer according to the customer’s budget.
Example:
“So, what would be your budget for this event?”
Tip: This allows you to adjust the offer without losing control of the conversation.
9. Offer More Flexible Payment Terms
If the customer is facing financial difficulties, offer more flexible payment terms instead of a discount.
Example:
“I understand that paying in one go can be difficult. How about we split the payment into 3 installments with no interest? This way, you can pay in installments and still have the inflatable toy for your event.”
Tip: This helps the customer manage their finances better without you having to reduce the price.
Between the Lines
Use the Endowment Effect and Other Strategies to Increase Order Size
When the customer says “this is more than I expected to pay” or directly asks “how much does it cost?”, it’s easy to fall into the temptation of reducing the price. However, this can devalue your product and lose the opportunity to increase the average order size. Instead, use the Endowment Effect and the 9 strategies shared in this article to maintain your product’s value and increase the order size.
Remember: the key is to qualify the customer, present the value, and offer options. If you follow these tips, you’ll be well-positioned to close more deals without losing your margin.
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