"Your price is too high!"
If you've been involved in sales for more than a week and a half, odds are, you've probably come across those particular five words at least once in your career. In fact, if you're like most of us, you've likely heard them a thousand times and counting.
In my experience, price is the single most common objection encountered by salespeople in every industry, city or sector of the economy. It can also be one of the most difficult objections for many sales professionals to overcome.
Fear not - an objection over price doesn't have to be a deal-breaker! The following five-step process can help you handle price objections from both new and established clients, and go on to build long-term - and profitable - relationships.
Step 1: Talk it over first
The first thing is to make sure to talk about the price before sending the client anything in writing. Verbalizing what you think the price will be before sending a formal proposal can significantly reduce the chances that a price objection will arise.
For example, while you're still in front of the client, give them a rough estimate of what you think the price will be. Say something like, "it's going to be around ten thousand dollars. How does that sound to you?"
If they object, this allows you to deal with the issue face-to-face and right up front. If you write the price down and email it to them later, on the other hand, there's a good chance that - if they don't like your price - they might simply not call you back.
Step 2: Be 100 per cent committed
Next, make sure you are 100% committed and convinced that your price is fair before you tell the client what it is.
If you don't think your prices are fair value for the goods or services you have to offer, no one else is going to believe it either. As a sales person, you must be able to say to yourself: "you know what, if I was in the buyer's position, I would buy this. This is a great deal, at a good price!"
How can you reach this level of confidence? Start by doing your homework. Find out in advance what your competitors' prices are like, so you know whether your customer is comparing apples to apples.
Plus, remember that an objection over price is often just an attempt by clients to see if they can make us squirm a little. They know that most sales people are terrible at handling that objection, so they figure it's worth a shot to see if they can get a better deal.
As long as you keep in mind that an objection over price isn't necessarily an indication that the client is about to walk away, you'll be able to keep your cool and remain firm in your conviction that your prices are exactly what they should be.
Step 3: Don't assume anything
I'll save you the old joke about what you do to "u" and "me" when you "assume" anything. Suffice it to say, it holds true when it comes to finding out exactly what "too high" means to your client.
When most salespeople are told that their price is too high, they make an immediate assumption about what "too high" means. If they're presenting a $10,000 proposal to a client who says the price is too high, for example, the sales person might automatically think that they're 10 per cent too high, or 25 per cent, or 50 per cent or so on. Then, they offer a discount based on that assumption, rather than basing it on what the client really had in mind.
"Too high" is a very subjective comment. So before you start making any counter-offers, take a deep breath, relax and don't say anything for a good three seconds. Just pause, look at your customer and gather your thoughts.
Sometimes, those three seconds of silence are enough to encourage the client to elaborate. If they don't, come right out and ask them precisely what they mean.
Step 4: Find out what "too high" really means
Start by acknowledging the objection and showing the customer that you appreciate them sharing it with you.
This can be as simple as saying something like "thanks for sharing that with me," "I appreciate you noticing that" or "I appreciate your honesty." Giving them a small compliment helps them to feel good about asking the question and reassures them that you're both on the same side.
Remember, the client has every right to raise any objections or make any comments they want. The worst thing we can do is to try to justify our position or defend our prices. As lawyers have known for centuries, nothing makes an innocent person look guiltier than trying too hard to protest their innocence.
Instead, the very best sales people look their clients square in the eye and say, "you're right; our prices aren't the lowest in the market. How much too high are we?" or "what do you mean by too high?" You can even just repeat the statement "too high?" and wait for the client to fill in the blanks.
By acknowledging the validity of their objection, you're turning a potentially costly confrontation into a sincere invitation to work together towards a solution that will be beneficial for both of you. More importantly, by being so straightforward, you stand a better chance of finding out exactly what the difference is between the price you quoted and the figure the client has in mind.
Early in my career, I once had a potential client tell me that my price was too high. Turns out, they were only looking for me to come down by a grand total of five dollars. That kind of discount was well within my authority and my comfort zone, and I considered it a small price to pay for establishing a profitable relationship.
Now, if that same client had wanted me to come down by five thousand dollars, well, let's just say the story might have had a different ending.
Step 5: Listen, respond - and if need be, move on!
Last but most definitely not least, listen to the answer the client gives you.
Most salespeople are good at asking questions. Only the very best are masters at actually listening to the response.
If you say, "how high is too high?" or "what do you mean by too high?" and be quiet, you will get a nice long answer. Once the client has explained their objection, I usually respond by saying something like: "if we can't get our price down to that lowest level, does that mean there is no chance that we will go forward?" Or I might ask, "so is pricing your only consideration?"
By asking these questions, I want to find out - once and for all, beyond any shadow of a doubt - whether they are making their decision based solely on price, or whether any other factors will influence their choice.
I'm hoping that price isn't the only thing they care about, so I can move the conversation onto that other topic. But if they really are only interested in buying the cheapest option available, I want to know that as early as possible so I can decide then and there what I want to do with that information.
As sales people, we have to be prepared to walk away from business where the client isn't willing to pay what the marketplace has determined is a fair price. This can be much easier to do if you have a healthy pipeline of other prospects to sell to.
You can't and won't sell to everyone. Having a healthy pipeline (and constantly prospecting to keep it full) is your best defense against any objections, because it gives you the confidence to walk away from a deal that could cost you more than it's worth.
The ironic thing is, the more business you walk away from, the more business chases after you. As often as not, the minute you tell a client that you don't think the deal is going to work, is the same moment they come running back to tell you that they're ready and willing to do business.
About the Author:
Colleen Francis, Sales Expert, is Founder and President of Engage Selling Solutions (www.EngageSelling.com). Armed with skills developed from years of experience, Colleen helps clients realize immediate results, achieve lasting success and permanently raise their bottom line.