Handling Price Objections
Of all the objections salespeople hear in the course of a day, price is often the most common one and usually the most difficult one to handle. In practice, price is rarely the true outstanding issue.
When you don’t know much about what you are buying, you buy price. Part of your job as a sales professional is to educate clients about what they pay for when they buy your product or services.
In order to avoid this objection, we find that honesty is the best solution. During your sales presentation, you can bring up the issue of price and openly ask the client whether they remain interested. Try something like;-
“Ben, I’m going to tell you now that I think our product or service will be helpful for you. However, I’m going to let you know that although we aren’t the most expensive option out there, we are not the cheapest either. I always like to point that out so that it does not surprise you later. Knowing where our prices fall, does it make sense for us to continue?”
Managing the Objections
Instead of being tempted to automatically drop your price, here are some options to manage this objection.
- If you can, find out in advance what their budget is and then offer them products and services accordingly. One advantage of this approach is that you will create a proposal that meets their budget, which makes it more attractive. The disadvantage is that you may have left money on the table. However, a subsequent sale (once they realise how valuable you are!) can open that additional opportunity to you.
- You can give them the pricing in layers of options: the platinum version, the mid-range version, and the economy version. Frequently the client will pick the mid-range (and sometimes they’ll even pick the platinum range), but rarely do they like the image of their company buying the economy version.
- Use a differentiator if you have one. Yes, your fee may be higher than that of the competition, but you can demonstrate the added value the client gets when they choose your product/service. This works when you do indeed have a feature or benefit that puts you in a competitive position. For this one, you have to do your homework ahead of time. You want to be prepared with your USP and know what the competition can offer as well.
- Make it easy to say “yes”. Suggest a payment plan or a lower up-front cost with the final payment after the product/service has been delivered.
- Once they state their objection and you answer it, ask them if they have other concerns. Then answer the next one and ask again. The idea here is that the first objection they raise may not be the real objection that they have. You will need to ask skilful questions to get to the heart of the matter.
Four Factors that Stay the Same
There are some things that you should always emphasise when dealing with a price objection
1.The value of ownership versus the cost of purchasing
2.The value of the service versus its cost
3.The value of long-term benefits versus the up-front costs
4.Talk about benefits rather than features
If you get tongue-tied every time you have to talk price, practice until you can get it right. You want to sound relaxed, confident, and in control; not uncertain, tense, and fearful.