Price objections are the most frequent and the most dreaded among all sales objections. It automatically triggers your defenses as your customer puts you on the ropes trying to beat a price reduction out of you. And you fall for it every time. You try unsuccessfully to defend it at first, but then you go back to your old defaults of discounts and reductions. Rather than defend your profits, you gladly hand them back to your customer because making the sale was more important. Less profit is better than no profit, right? It depends, but why is less profit a foregone conclusion for you?
When a customer brings up a price objection and you offer a defense or a reduction, what you are actually doing is giving a confession. Yes, my price was too high because I tried to oversell you, my profits are excessive and I don’t believe in the value of my original proposal. If these confessions weren’t true, then why were you so quick to concede your position? As far as the customer is concerned, it’s their ‘Gotcha!’ moment and now they own the sale and they take you for a long and profitless ride. Yes, it is important to stay flexible and work with customers and their budgets, but pricing is not your competitive advantage so stop trying to sell like it is. You can stop giving your profits away by following the 5 easy steps.
- Validate – Everyone is focused on price. Our culture conditions us this way through marketing. Some people forget that price is not the only important thing. So there is no need to draw a line in the sand right away with someone’s sticker shock. A simple acknowledgment can keep the situation from escalating at the start. “Yes Mr Customer, I always look at the price first and most of my customers are the same way. Your concern makes sense to me.”
- Challenge – Instead of defending your price, the customer should defend their assumption of the high price. Innocent until proven guilty, right? What basis do they have for making this statement? Is there another true comparable option? Maybe they are right or maybe they are playing you for a sucker. Challenge their price objection with a challenge of your own. “Mr customer, I can understand that you want the best price, which is what I have offered, but what do you compare it to that makes you believe it is too high?”
- Provoke – You must align the customer’s values and needs by provoking their own belief system. Start the conversation with, “Mr. Customer, is the price the only thing that is important to you when you make this purchase? Do you find that going for the lowest price gives you the value that you really wanted?”
- Explain – A price objection means either you are out of the customer’s budget and there just is no sale to be made or you have not effectively presented the value of what you are selling in context of the price. Don’t overcomplicate this. Pick the 3 most important problems you are solving or the 3 benefits you are offering that puts your price in a proper perspective. “Mr Customer, if I understood you correctly, these are the issues that were important to you. Have I properly addressed them in a way that the price makes sense and, if not, where did I lose you?”
- Ask again – The key to success is the faith in knowing you’re right. So, unless the customer can demonstrate that you got the sale all wrong, reinforce your position by asking for the original sale again. Customers respect confident salespeople more than they like to admit. Asking again communicates to customers that yes, you believe your price is fair, your profit is reasonable and the value is as strong as it ever was.