Nothing sucks the air out of a sales conversation quite like a price objection. When it comes time to talk about price, the situation suddenly gets real for both the buyer and seller because everything is on the line including value, expectations, commitment and certainly emotions. Price is the one objection that can stop the sales process faster than a cheetah chasing a chimpanzee and it is equally as deadly. And no wonder; it is a common sales tactic used by customers to attack your profit. It gives control to the customer and puts you in defense mode while destroying your confidence. Worst of all, a price objection in the sales process is one that most sales people will commonly fail until they learn to handle it properly.
Here’s the truth about price objections: purchasing decisions are almost never about price alone. In fact, people will shop your products and service on price when they perceive no other value. Worst of all, immediate price reductions are an admission of guilt that will damage the trust you were trying to build with your customer because, at least in their mind, you are admitting that you were going to try to overcharge them. Now I’m not saying that price isn’t important, but it is the oldest trick in the book that customers will use to keep you in line. However, you already did your best to give a fair price and you can’t just give in. What you need is the Price Pushback Process. This is the best way to get the conversation away from price and back to value so the sale can get back on track.
- Acknowledge: “I understand that you are concerned about the price”
- Empathize: “I don’t blame you. When I am a customer I always want to make sure I am getting the best possible price.”
- Affirm: “That’s why I always make sure to quote the fairest price possible the first time.”
- Challenge: “Do you mind sharing with me what your price expectations are based on?”
- Ask Again: “Based on everything we talked about, I still believe this is a fair price. Is this price a deal breaker?”
Always ask twice for your price, but you’re not done yet. The customer still won’t back down from the price conversation and you feel like you’re backed into a corner. But there’s a way out. These 4 questions will politely challenge the price objection in context of what’s really important and, furthermore, you’ll know for certain if this is just a price objection or a price rejection.
- “Is price the only thing that matters to you in this decision?” *hint, the answer is ‘no’.
- “Other than price, what are your three most important decision criteria?”
- “If I compromised those critical issues to lower the price, would that be okay?”
- “If I cannot meet your price expectations, will that be a deal breaker?”
Based on these responses you can decide if and how you will negotiate. That is especially true of the last question. The important thing is that you are no longer on the ropes while shifting some of the risk to the customer. You don’t have to play hardball, but you do have to be confident that your price reflects the value.