Last Episode # ➡️ Speed Matters
“This it too expensive.” “We can’t afford this right now.”
“There’s no room in the budget for this.”
I’m assuming you’ve heard these objections before.
You get to the finish line…And instead of signing the contract, they balk at your price.
Pricing is a tough objection to get passed. Mostly business owners and sales people when they try justifying the price, they seem defensive.
Our natural gut reaction!!
If you give them a discount, you seem weak and value of your product or a service goes down.
But, that’s the wrong thing to do! And you also know that if you hold to your price, you might lose the deal.
So what do you do?
Well, truth is…
If you’re getting price objections, the mistake was made far before you revealed the price that’s for sure.
#1 reason is you are a Porsche dealership who is trying to sell a value car to a customer who wants to buy a value car like Toyota Corolla. Your market positioning is wrong and hence you are attracting the wrong people. Mostly business owners haven’t even thought about their pricing strategy properly.
Timing, not your service or a product can be an issue
The price objection you’re hearing now may be related to real-time cash or budget availability, not the value of your product or service. If you’re selling at the end of a buyer’s fiscal cycle, for example, the prospect may have most of their dollars already committed.
If you can get creative with financing options or push the deal forward enough so that it can be funded out of a different quarter, fiscal year or budget, you may eliminate the pricing issue without directly addressing it. Nobody likes to push close dates out, but it might be worth it if you can preserve full price (I bet your CFO will go for that option as well).
Now let’s assume you are sitting in front of the right customer, they want to buy Porsche (They are a good fit for your service/product) then here is how to handle pricing objections:
“Too expensive compared to what…what are you comparing to?”
We cannot compare apples against oranges.
“Expensive” is a relative term. If you can find out what the prospect is comparing your product or service to, you can more precisely differentiate value. Here you can clearly distinguish yourself from a company who is cheaper then you but their product or a service is not similar to yours.
Also, standing up for your product or a service:
“I hear you. The best products, services, consultants, coaches are often more expensive.”
According to sales expert Geoffrey James, “a price objection isn’t ‘real’ until the customer has brought it up twice.” Using this response the first time you hear “it’s too expensive” can help you separate the prospects who truly don’t have the budget from those who are merely kicking the tires.
Bringing the client back to the discussion around value
“Price is an important consideration. So I have some context: How much research have you done on what a typical investment is for a product/service like this?”
According to Andrew Quinn, VP of Learning & Development at HubSpot, the question behind this one is, “Do you already know what something like this should cost?”
Thanks to your prospect’s inexperience, they might be placing your product in the wrong category.
For instance, maybe your solution has both a data storage and an analytics component. If they compare it to other data storage options, it’ll look significantly more expensive. But if they benchmark it with analytics software, your price is right in line with the competition.
Once you clearly clearly distinguish the value then you will focus on saying that:
“[Prospect’s name], I would rather apologize for the price today than for the lack of quality and your unhappiness forever. Now, let’s not let a few dollars keep us from doing business together.”
This reply comes from famous salesperson and trainer Zig Ziglar courtesy of Butch Bellah. It reminds your prospect skimping on price will hurt them in the long run.
Last thing is, no one likes to be sold…everyone likes to “Buy” to end if you did everything then give them space and time.
If you’ve qualified the opportunity, if you know that the prospect needs what you’re selling and is convinced that your company can provide the best solution, then walking away isn’t going to lose you the deal. It’s going to call their bluff. And if it doesn’t, if they don’t have a sense of urgency to solve a problem or capture an opportunity, then your deal may not have been well-qualified to begin with.
Connect with us:
Instagram: Business Growth School
Ali’s Twitter: Ali Salman
Leave a Review on iTunes: Business Growth SchoolNeed help growing your service based business? Click here to get started