- Blog post
Proven strategies you can use when you hear ‘That price is too high!’
Price still ranks number one in terms of objections that salespeople encounter. It’s a daily reality, and preparation for this objection is fundamental to success.
Sales coach and author Tom Reilly says whoever is better prepared to talk about price – the seller or the buyer – will emerge victorious. He shares several strategies you can use to emphasize value, hold the line on price, and make sure your deals are profitable:
Slow down the process
If you allow buyers to push you into a quick decision on price, emotion will drive your response. So take a long, deep breath. You need time to think and time to make a good selling decision.
More than 50% of all price objections are bogus, according to sales research. So the the first step is to dig for the “what” and the “why” behind the objection.
Make sure you understand what the buyer is saying. Ask, “Could you be more specific, please?” “How is our price higher?” or “Please elaborate for me.” Such clarifiers encourage the buyer to open up and help smoke out ploys.
Dig for the “why” behind the price objection: “How did you arrive at that budget?” “What did you anticipate the price to be?” “Why has price become an issue for you?” Finding the motive behind the objection will show you the way to deal with it.
Check the buyer’s focus. What is she really looking for? Is she comparing apples-to-apples? Is she referring to the acquisition price or cost of ownership? If her focus is short-term, shift it to long-term.
Check for sincerity. Is she giving you a real objection or is this a fishing expedition? Ask: “Is price your only reason for hesitating now?” “Are you prepared to move forward if we resolve this issue?” These questions test the buyer’s sincerity.
Add or subtract value
There are many ways to respond to price objections that don’t involve a knee-jerk drop in price. Here are a few to consider:
Add value through bundling. “If you have a concern about the value in relationship to the price, maybe there’s a way we can add value to the package so that you feel more comfortable with this solution.”
Subtract value through unbundling. “If your primary concern is price, maybe there is a way for us to remove some of the value from our solution to get to the price you can pay.” Some people call this value subtraction. Others call it value substitution. The power of this response is in the shock impact on the buyer. What you’re saying is, “The only way for us to charge you less is to deliver less.”
Restructure the deal. If the objection involves ability to pay, not value, look at how the deal is structured. “If budget is your primary concern, I’m sure there’s a way we can restructure our proposal to reflect the budget constraints you’re working with.” You might be able to change the terms of the agreement or adjust the billing cycle for your buyer.
Ask provocative questions
Pose questions that will cause your buyer to rethink her request for a cheaper price. Example: “You know what it will cost if you pay a little more to go with our solution. Do you know what it is going to cost you not to go with us?”
Or tap into security needs by asking, “Is price the safest way to make this decision?” The word “safest” jumps out because it’s emotion-packed. You’re asking the buyer to rethink if price is going to get him to where he wants to be.
Reassure the buyer
This is important because paying a higher price is risky. Here is where you support your price with testimonial letters, customer satisfaction data, or any other proof source that reassures the buyer.
Use your guarantee or warranty. Stress the positive aspects of your guarantee, not the remedies. Do you think the buyer wants you to give her money back? No! Why would she want to waste her time and resources on that type of a remedy? What the buyer really wants is reassurance that she is going to get exactly what she needs and then some.
Give it back to them
For years salespeople have tried to convince buyers that if they don’t buy right now, something negative is going to happen. That’s why one of the most unexpected yet powerful techniques you can use is to “give it back” to the buyer.
Ask this question and watch the expression on the buyer’s face. “Do you really need to say ‘no’ to our price right now?” That will raise their eyebrows.
“No, not really,” is how they generally respond.
“Well then, let me offer this suggestion. Why don’t you think about it for a few days and make sure that when you say ‘no’ to our price, you understand that you are also saying ‘no’ to everything else that we’re bringing to the table.”
This shift in momentum will catch the buyer so far off-guard that you may be able to resurrect what appears to be a dead sale. The last thing the buyer expects is your telling him to think about it. When you do so, you communicate your confidence in your value proposition.
Adapted from “Crush Price Objections,” ISBN 0071664661. To learn more from Tom Reilly visit www.tomreillytraining.com