Monday, February 4, 2008

How to Make the Fee of Your Care Seem Cheap - Even If It's Not

One of the several great educational experiences I've had was studying sales and marketing in a wide range of industries and one industry that I studied was the aluminum-siding business. Today, I'm going to tell you something I learned from this industry --a secret you should be using every time you deliver your Results of Test Consultation.

The typical aluminum-siding "package" sold in the sixties, retailed at $2,600. That was a lot of money back in 1967, especially in the working-class neighborhoods that were targeted. Like all good selling pitches, the focus was on the benefits first. Salesmen did a very good job helping their prospex imagine how much better, easier, and fuller their lives would be once the asbestos shingles that covered their homes were hidden beneath a fine, shiny facade of bright, white aluminum.

It's what happened after they made those big promises that I want to talk about today -- what they used to do after the sale was made. By that, I mean after the prospect had emotionally committed to owning the aluminum siding but before he found out how expensive it was.

This is a critical part of any sales presentation, but it's especially sensitive when the potential customer has little or no idea of the product's price. The challenge: Now that you've lodged a hook deep into your prospex heart, how do you get his brain to interpret your price as a good deal?

An inexperienced salesperson might want to break the price to the prospect slowly -- by, for example, quoting first the cost of the gutters and leaders (say, $400), then the cost of the underhangs and fascia (another $400), then the windows and doors ($800), and finally the siding itself ($1,000). But, though logical, this method doesn't work very well.

"If you want to make a liverwurst look cheap," a sales trainer told me, "say it's pâté."

If I didn't understand what he meant when he first said that, the principle became clear when I saw the concept in action. After getting some young couple to "imagine" how much nicer their house would look clad in aluminum, how much the neighbors would admire them, and how generally happy they'd be, the salesman would ask them, "Now, Mr. and Mrs. Smith, tell me this --- how much would you guess it would cost you to cover your house in solid oak?"

"Oak?" they would ask. "But we thought..."

"I'm serious," the salesman would insist. "How much would it cost?"

It was the husbands who always ventured the first guess. "I don't know. Maybe $5,000?"

"$5,000?" The salesman would look at the wife. "Do you think you could do it for $5,000?"

"Gee, I don't know. Probably not."

The number would go up. $6,000. $7,000. $8,000. To each new estimate, the salesman would shake his head sadly and say, "You should be so lucky."

Then, the salesman would pause for a good while, giving the frazzled customers a chance to imagine how they were going to come up with the $10,000 this was bound to cost, and then "hit them with the zinger" (as they liked to call it back then): "Let me give you 10 good reasons why aluminum siding is better than solid oak!"

It wasn't logical, but it was effective. By the time the salesman finished enumerating the 10 reasons aluminum was better than oak, they were mentally prepared to spend $10,000. When they were told they'd have to fork out only $2,800, they practically jumped with joy.

This trick has a long history in the business of selling. It's been a mainstay of many of the best salespeople I know. Yes, it's very powerful. It's also very effective and surprisingly adaptable. In fact, it should probably be a key part of every patient consultation that is made by you or your Associates.

In his book "The Psychology of Influence," Robert Cialdini puts a label to this technique. He calls it "the principal of contrast" and illustrates it with a story he heard from Leo Rosten about the Drubeck brothers, Sid and Harry, who owned a men's tailor shop in Rosten's neighborhood while he was growing up in the 1930s:

"Whenever the salesman, Sid, had a new customer trying on suits in front of the shop's three-sided mirror, he would admit to a hearing problem, and, as they talked, he would repeatedly request that the man speak more loudly to him. Once the customer had found a suit he liked and asked for the price, Sid would call to his brother, the head tailor, at the back of the room: 'Harry, how much for this suit?' Looking up from his work -- and greatly exaggerating the suit's true price -- Harry would call back: 'For that beautiful all-wool suit, $42.' Pretending not to have heard and cupping his hand to his ear, Sid would ask again. Once more, Harry would reply '$42.' At this point, Sid would turn to the customer and report: 'He says $22.' Many a man would hurry to buy the suit and scramble out of the shop with his 'bargain' before Poor Sid discovered the 'mistake.'"

It's not always true, but most people --- most of the time --- like a bargain. We not only want what we want and what we hope it will give us, we also want to pay the "right" price for it. The best way to make the price of your brand of chiropractic seem "right" is to contrast it to something similar that costs more. If you happen to sell inexpensive CZ diamonds, this isn't difficult. The stones you can sell for $5 or $10 apiece look every bit as good as the authentic ones going for 1,000 times that price.

But if the price you are asking isn't such an obvious bargain, you need to be more creative. Instead of comparing your brand of chiropractic to similar ones that cost the same, find (or create) something special about your brand that makes it unique. Focus on that unique selling proposition and you will be able to come up with a script allowing you to contrast your product or service with something much more valuable.

I did that early in my career when I compared subscribing to a $100 newsletter I was marketing to joining an expensive marketing club (which sounded as if it should cost $1,000). I've done it hundreds of times since in all sorts of creative ways. You can too.

The principle of contrast is sometimes used to create additional sales. It's done in direct marketing all the time by selling the main item first at one price and then additional similar items at a discount.

When I go to buy a new wardrobe at Armani every year, Carole, my "personal consultant", uses the principle of contrast to get me to spend a ton of money on "accessories." Here's how she does it:

First, she sells me on the suit. That is usually expensive -- sometimes $1,000 or more. After that's done, I'm feeling finished -- but Carole's not finished with me. She takes me over to the shirt counter to show me some shirts that "will go sensationally" with the suit I just bought. These shirts are expensive --- usually more than $200 each. I don't normally pay that much for shirts, but after laying out so much on the suit, they seem cheap. When Carole is done selling me two or three overpriced (but, by contrast, seemingly cheap) shirts, she hits me with the $170 ties. I'm lucky to get out of Carole's grasp at twice the price of the suit.

A real-estate broker I know, uses the principle of contrast to get his clients to buy more real estate. If I tell him I'm in the market for a two-bedroom house off Atlantic Avenue for about $250,000, he'll be sure to first show me at least one or two of the same size and description that are overpriced. After being disappointed to see a couple of so-so houses priced at $300,000 and $325,000, I'll be thrilled to find one at a mere $275,000 -- $25,000 more than I was prepared to pay, but a bargain in contrast to what I had just seen.