Whenever I work with salespeople and business owners, they vent their frustrations with the number of price objections they encounter—particularly because they don't understand why, or how, they should deal with them.
As the market gets tougher, you're probably discovering people are objecting to your prices, and negotiating with you more than ever before. Are you well enough prepared to deal with that?
What salespeople and business owners often don't realize is, there are any number of reasons why clients object to their prices, and sometimes they generate those objections themselves. Something in their approach or what they have said has generated the price objection for them…and then they don't deal with it well!
So let's have a look at the main reasons behind the objections, so we can lessen the chances of getting them in future…
1. It's a negotiation tactic. I started out as a professional buyer-essentially, "beating up" salespeople for a living. It gave me a great insight into how people buy....and often how people don't sell well to others. I've lost count of how many awful sales pitches I endured during that period.
Any buyer or decision-maker worth their salt knows the minute a potential supplier gives them a price, a predictable exchange follows. If they reply with "That's too expensive," or "That's higher than your competitors," most potential suppliers will crumble.
The latter will say something like, "How much were you thinking of paying?" Daft move! The buyer, smelling blood, replies with, "Oh, about half that." Now you're in trouble. You're starting to negotiate from a price that' 50 percent below where you wanted. And if the buyer is any good, the price is only going down from there.
You have to expect this strategy and be prepared to deal with it. Prepare and practice your response.
2. You don't give enough value first. If you're the sort of person who never quotes a price upfront, listens intently to what the customer is saying, questions well to uncover their needs, matches back your product or service with those needs, demonstrates huge value, and then closes for the business-every single time—then you probably don't have anything to worry about here.
If, however, there's ever been a time where you've been under pressure to deliver a price earlier than you wanted to, where a client didn't really seem to think your product or service was worth the price you wanted, or where the client bought from someone else (even when your product or service would have been better for them) then it is vital that you read this and digest it fully.
The problem is, we often let the client control the meeting and the flow of the conversation, so the conversation turns to price quicker than we would like. We haven't had time to get the client to appreciate the value in what we're offering, so is it any wonder we get a price objection?
As the market gets tougher, it's more important than ever for the client to appreciate the value in what you provide. The faster the conversation goes to price, the less chance you have of the client appreciating the value in what you offer—which, again, means a price objection.
Don't give prices out before you're ready. Be prepared to deal with the client asking the price and how you're going to deal with it.
3. You talk about price. Over the past few weeks, I've been doing some field sales assessments—accompanying some salespeople on their meetings with prospects. The client said their salespeople had been getting a lot of price objections recently, and had put it down to the "credit crunch" and their particular industry.
When I was observing the salespeople in their meetings though, it wasn't the prospective clients that were taking the conversation towards price—it was the salespeople themselves!
Think about it: If you ask a question like "How much do you normally pay for…" or "What's your normal rate on this sort of thing?" then what else can you expect from the other person except a question about your price?
Even worse, if your only way to differentiate your offering is on price-saying things like "We're cheaper," or 'We'll match/beat their prices," then who's to blame for taking the conversation towards price? You are!
Stop asking questions or making comments that refer to price, and watch the impact that has on getting you less price questions from the client.
4. You don't differentiate yourself enough. In the current market when times are tough and there seems to be more competition than ever before, it's absolutely vital you differentiate yourself from your competition.
Yet many salespeople and business owners fail to do this adequately. I was doing some work with a recruitment company the other day, and one of their consultants got an objection on a live call I was listening in to. The prospective client said, "I'm happy with the agency I use at the moment." The consultant then proceeded to tell the prospective client how they were different by saying, "But we're different to other agencies." The reply from the prospective client? "Yeah, every consultant who rings me up says that too."
Differentiating yourself from your competitors is really done by acting, saying, and being different—starting with your initial phone call. If your call sounds the same as all the rest, you ask the same questions as all the rest and you say the same things as all the rest, is it any wonder that clients consider you the same as all the rest?
Andy Preston is an expert authority on selling for small businesses. Visit him online at www.andy-preston.com and www.salestrainingbreakfastclub.com.