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As L’Oreal prepared to launch their brand of hair products in the U.S. in 1971, they faced a pricing problem. Their product was a premium brand; more expensive than many of their competitors on the market. They wondered how they could sell it successfully. Their solution? The now, world famous slogan, “Because I’m worth it.” In this simple phrase, they brought the price into context of value: yes it was more expensive but it was expensive because it was good and their customers were worth the investment: your hair deserves the best!

This solution - the unique value proposition - remains the best way to tackle your client’s price objections. Clients will always try to negotiate on price because they want to secure the best deal, whether or not they truly perceive that your product or service is too expensive. When a client objects on price, you need to consider their objection carefully to categorize it before responding - what is really driving their objection? Then you need to educate them on why your product is great value and will provide an excellent return on their investment.

Here’s how to provide a great solution to your client’s price objections.

Objections Based on Competitor’s Pricing

When a client objects on price, try asking them, “Too expensive compared to what?” or “Can I ask you what you’re basing that assessment on?” If it turns out that they are comparing your price unfavourably to another company, this gives you the opportunity to restate your product or service’s unique value proposition. You should be well prepared to explain why your product is a better solution than your competitors.

Objections Based on Trying to Secure the Best Deal

If it’s not about a competitor’s pricing, it’s often that the client is simply trying to secure a discount or get a better deal. In this situation, you again need to make it clear why your product is high value and then ask them something like, “I understand that it seems costly, but the best products often are. Let’s say money was no object, how would our product help solve your problem?” In this way you are getting them to speak to the value of your product and why it’s such a good deal. You can follow up by asking them, “Are you going to let price stop you from getting the solution that your company really needs?”

Objections Based on a Lack of Understanding of the Marketplace

Prospects might also object on price if they’ve never bought a similar product before and don’t really understand how much they should realistically expect to pay. In this situation it’s about managing expectations. Ask early on whether they’ve bought a product like yours before. If not, you have the opportunity to educate them.

Objections Based on Budget

Unfortunately, it’s also often the case that your client has a tight budget and your product simply costs more than they are willing or allowed to spend. But that doesn’t mean that you have to give up or go straight to slashing the price. Again you can start by making them see value - especially in terms of the long-term gains. Ask them something like, “How much will it cost you to do nothing right now?” this will help them see the bigger picture and why your product is a worthwhile investment.

You can also ask them about the ROI that they are hoping to see - this again helps them look at long-term value. If it really is a case that their budget won’t stretch, try working with them to find a win-win solution for you both. Can you break down the cost into different fees so that it doesn’t just hit one budget line? Can you offer them the chance to pay monthly or quarterly rather than in one lump sum? By getting creative, you might find a way to secure the deal without lowering the price.

If you want to master the negotiation process and close more deals at higher profit margins, while keeping your clients happy, learn more about the CPSA’s Effective Negotiation Strategies Course.

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