How To Handle Price Objections Like Nobody’s Business

How To Handle Price Objections Like Nobody’s Business

How To Handle Price Objections Like Nobody’s Business Is that a final no?

Sales superstars and newcomers dread the same response: NO! 

It’s frustrating. It’s deflating. It can throw your whole game off.

Especially when you’ve spent weeks—or even months—of developing a solid relationship with your client, getting a rejection flat out sucks. What’s worse is when you’re really sure your product is a great fit. You’re certain it will bring value to their business. The return on investment (ROI) outweighs the cost.

In fact, you’re already excited to see the product in action.

They were enthusiastic and responsive the whole time. Simply, all the buying signals are there. You think: You’re just in this very long-drawn closing stage.

Then, you get that hard no.

And, what’s the objection?

Your prices are too high.

Out of all possible objections, a client saying they just don’t think they should be paying that much for your product must be one of the most painful to salespeople. And…one of the most common.

It’s natural for business people to want more value for their money—even when you’re presenting them with the most valuable thing in the world. They will always ask for a price cut.

That’s an exaggeration but you know what I mean. Most times, they just want a good deal.

Even so, it’s still a very real situation that salespeople often face. Sometimes, even when clients are just trying to squeeze out a deal, a bad response from the salesperson can throw off the whole deal.

Knowing that, it’s best to be ready and to understand the nature of price objections inside and out.

This is a post that will help you be prepared and get to the core of what price objections are and how to handle them.

Put yourself in the prospect’s shoes

Look at the situation from your prospect’s point of view. To fully understand how they think and why price was their main objection, you gotta feel what they feel. Or at least, see why they feel that way.

Take a moment and imagine yourself in a dealership, negotiating a deal for a new car. It’s something you’ve looked forward to the whole year. You’ve come to a point where you know you need a car—and you most definitely want one. It’s a super exciting process. Positive emotions flying around.

It should be an easy purchase, right? You’ve been mulling over which car to buy and how awesome it would be when you drive the car out of the dealership.

However, when you get to the price discussion….negative emotions set in. You already figured out how much you’re willing to spend on this car months ago. But now that you’re here to finally close the deal, doubt comes rushing in. Can I really afford this? Is this car worth this much money? Is this a good deal? Maybe I can just keep running down my old car?

Whether it’s a fancy dinner or a full-suite software for a company, anything with a significant price tag will bring in negative emotions and last minute shuffling of feet.

Even if it’s for something you really want and need.

You got to understand that objections based on price are not always price objections per se. If you’re selling a high-ticket item with a proven great ROI, it being high-ticket can be the barrier from the close. It’s not always an issue of value. Not always an issue of budget. Sometimes, it’s just that natural reaction to preserve our resources.

Did you bring up price too early?

I think it’s best to always postpone discussions on pricing until you’ve thoroughly communicated the value of your product. There’s always more to be said, so it’s not really a mechanical situation. Just remember that when you bring up price, they will pit that against whatever value you’ve demonstrated so far.

Assuming that your prospect was qualified meticulously, a price objection can stem from one of two things:

1. You didn’t demonstrate your product’s true value well

Look at it like this: If someone sells you a big rock for $5000, you’d give him a big fat no and maybe some giggles. Now if the salesperson sold you a rock alongside a photo of the princess cut diamond that is within that stone, $5000 makes sense and you’ll seriously consider getting it since the value is off the roof.

If you’re selling diamonds as rocks, you’re asking for price objections.

This is what Grant Cardone said about price objections, “Remember, price is a myth. While the buyer may shop the lowest price, it is value that they really want, even during tough economic times. People buy products and services that solve problems.”

2. You brought up price too soon

Most salespeople are trained when exactly to disclose pricing so the issue of bringing up pricing too soon is seldom triggered by the salesperson himself. It’s usually giving in to a prospect’s question about price early in the sales process.

If this happens to you, and it will, you better be prepared.

Here’s a sample script of what you can respond with:

“Before we get to the pricing, we both must be absolutely sure that we are the right fit for your needs. Mr. P, let me ask you, is it alright if we come back and discuss the price in detail when we’ve already discussed what you need?”

Build upon their response. Draw out the full value of your product to their organization. Bottomline is to delay pricing discussion until you are sure that the prospect understands the value you want to bring to their organization.

People are more motivated by loss than gain

How much does not having your product cost them?

Break the price down and show the client how much more it costs them when they don’t use your product.

Let’s say Mr. P (your prospect) hits you with a price objection. Here’s one way to handle it.

Mr. P: “That’s just outside our budget right now.”

You:Mr. P, how much time does it take for your team to finish X manually?”

Mr. P: “About a week, not too long.”

You: “You see Mr. P, that right there is wasted time. It might seem like a short time now, but in a year’s time, that accumulates to around $Y. My product saves you time, and saving time is saving money. With how much you’re going to save, you’ll break even by two years and you’ll have a great system in place.”

Do the homework and be ready to use these piercing computations to show your prospect that your product is useful to them not only because it makes their operations smoother and easier…show them in actual numbers.

Ask WHY

When faced with an objection, our reflexes kick in and we blurt out the quickest response that makes sense to us. Or even a response that doesn’t make sense, sometimes.

What you need to train yourself doing is, of course, to think first before you say anything. Don’t come in there wanting the quickest way to close or the quickest way out instead.

Here’s what you do: Ask why. Ask why they think the price is too high. Ask them why it’s outside their budget.

Here’s the idea. Answer back with a smart question rephrasing the objection.

Mr. P: “We can’t proceed.”

You: “I’m sorry to hear that. Why?”

Mr. P: “Out of budget.”

You: “I appreciate your honesty. What are you comparing the product to?”

Mr. P: “Competitor X.”

You: “Oh, the issue we have here is that we haven’t had the chance to really work together yet. I understand that you’re not very familiar with our product as of now. I would like to provide a reference from a company like yours that was previously using competitor X. We have a case study on their savings and growth. Would you be comfortable discussing business when we get that to you?”

Agree with the prospect but flip the script

Sometimes, you just have to agree with the prospect to get them to agree with you. Doing so will soften your image to them from being the hard salesman to someone who can empathize with them. When this happens, their guards come down and you can speak rationally. 

Mr. P: “The price is too high.”

Client: “Yes. I absolutely agree this is a huge investment. See, I know this product adds immense value. The price point is set here because (benefits). It gives those who use the product a clear competitive advantage. If it were cheap, everybody would be using it, right? We came to you since your company is the right fit and can support the level of advantage this product comes with. How would X increase in productivity impact your current operations?”


Some acronyms to guide you in handling price objections

Anyone in sales knows salespeople love giving acronyms to processes, tips, principles and other sales matters.

Here are some related to handling price objections:

L.A.I.R.

Listen:
Open your ears and extract what the objection really is. Is it really a price issue?

Acknowledge:
Reframe the objection through minimizing negative words and feelings as much as possible. Repeat everything back to the prospect.

Isolate:
Ask if they have other objections.

Reverse objection:
Flip the objection by explaining why the deal is a good decision. Use as much case studies and reference their specific problems. Bring on the full benefits speech.

 

F.U.D

Fear. Uncertainty. Doubt.

This method used in sales discourages customers from continuing services from competitors by providing information that casts fear, uncertainty and doubt. This is a tricky method and should be used in caution. Taking hits on your competitor by directly criticizing them in your prospect’s earshot might not sit well with some prospects. Proceed with caution.

L.A.A.R.C.

Listen
Take heed at what the prospect is saying. Avoid the urge to cut them off. Wait patiently and actively listen.

Acknowledge
After they’ve stated their full objection, acknowledge the person. Let them know that objecting is their right and that their objection is reasonable. Skipping this part makes the conversation personal instead of keeping it all within business.

Assess
The next step is to assess the situation from your lens. Ask the prospect some probing questions if needed. Clarify points in their objection. Aim to put yourself in their shoes. The goal is to empathize with them.

Respond
Line up your ducks in a row and patiently answer all concerns in their objection. Take your time and don’t skip points. Answer all their concerns truthfully and thoroughly. Just stay within their points so you don’t create further issues.

Confirm
Check with the other person if they understood your response. Ask them if your explanation clears up all confusion. If there is still some objections, repeat the loop. Actively listen, and so on.

Are you ready to handle price objections?

The best way to handle price rejections strategically is to prevent sales deals from coming to that point. Exhaust all sources when studying your prospects and identify the fit of your product. If a partnership between your services and their business is a good one, selling based on value shouldn’t be hard.

Remember what Grant said: Price is a myth. Go out there and sell based on value. Just remember the points covered in this article whenever you face price objections.

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Dan Sincavage

Dan is a Co-Founder of Tenfold and currently serves as the Chief Strategy Officer. Dan oversees the Tenfold sales organization, manages strategic partner relationships and works with key enterprise accounts to ensure their success with the Tenfold platform.

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