You’re often torn: Your customers keep asking you to lower your price, and you’ll sell more if you do. On the other hand, you and your company make more money if you hold the price line. And once you lower your pricing, it is very difficult to restore it next time. You can reconcile this conflict when you know how to respond to “Your Price Is Too High.”
The price objection/stall is the most common by far. But it is not so often the real reason why the customer hesitates to buy
It seems that everywhere I travel, salespeople are tormented by the same objection. They ask me, “What do I do when the customer says my price is too high?” My response is always the same: “When the customer tells you your price is too high, the customer is right.”
The price objection is traditionally the quickest way for a prospect to get rid of a salesperson, and you will hear it almost every time you haven’t discovered any good reason for your prospect to buy. So the prospect is right. Chances are if you are hearing the price objection, you need to understand that you don’t have a pricing problem as much as you have a value problem.
Until you have established what your product or service will mean to the prospect (its value), any price is too high.
Price is Seldom the Real Issue
Buying studies have been telling us for many years that price is seldom the primary issue in purchasing decisions. Most of the research available today indicates that price ranks as only the fifth or sixth most important buying consideration. It just seems to be the most important in the minds of a lot of salespeople.
An executive with a major retailing chain recently told me, “We’ve found that our shoppers come in talking about price and leave buying value.” We know he is right. To prove it, all you have to do is stop by any municipal parking lot and count the number of Yugo automobiles you can find, if you can even remember what a Yugo looks like.
Value is the issue. Value is the combination of prospect need, price, perceived quality and anticipated service. In that equation, need is the key. It’s the difference between dropping by the sporting goods store to shop for a raft for weekend outings and looking for a raft when the ship is going down 50 miles offshore.
Eliminating the Price Objection
For many years, we have trained salespeople not to handle or overcome objections, but to develop strategies which eliminate or preempt them from occurring in the first place. The key is to anticipate the objections which are most common and then eliminate them by asking the right questions up front. The price objection can be handled the same way. Here are some ideas:
Selling on price is a losing position
The person with the lowest price will win in some selling situations. The problem is the person with the lowest price is always the most vulnerable: someone can always come along with a cheaper price. The other factor that makes this strategy so weak is that when price is cut, so is the margin to provide service. And eventually, service and quality will become an issue which cannot be answered at the lower price.
Our prospects don’t buy what we sell. They buy the results of what we sell. Charles Revson, of Revlon fame, said, “We do not sell cosmetics. We sell hope.” Concentrate on the results or consequences of the buyer having your product or service. How successful do you think Revson would have been if he had concentrated his advertising on telling women about the chemical make-up of his lipsticks? Most cosmetics ads talk about how beautiful a woman would be if she used the advertiser’s products. And, of course, if she were that beautiful, she could attract more men, or keep the one she had. Cosmetic makers sell the end result — the consequences of her using the product.
You and I need to concentrate on the consequences of the prospect owning and using our products. (By the way, we find out what the important consequences are by listening to the prospect, not by assuming which ones might be most important to the prospect.)
Value and consequences have a price tag
The real sales professional will quantify value long before price is ever mentioned. You and I have to discover from the prospect what the consequences are worth. If the prospect needs our product or service, there must be some dollar value to solving his or her problem. By using a logical probing process, the prospect will usually acknowledge the cost of the problems we are going to solve.
Sell to individuals, not companies
Understand that companies don’t buy anything. People, who happen to work for companies, do the buying. This is a lot more serious than it may sound at first blush. You need to imagine the prospect sitting across the desk, thinking, “Yeah, but what’s in it for me?” Everyone has his or her own buying motivation. Once you understand what that is, and can demonstrate how your product or service can positively affect the buyer personally or professionally, you are in the strongest possible position.
Buying is always an emotional process
Prospects’ buying decisions are always based on their perception of value. Even the most jaded purchasing agent buys on emotion. It’s true! The most brutal purchasing agent in your community has an ego that is probably emotionally attached to his or her ability to negotiate the best possible deal for the lowest price. As selling professionals, we have to recognize this fact and let customers have the emotional satisfaction of getting a great deal. We just have to anticipate their needs and provide them with a deal on value instead of straight price.
Sell Value Or Fight Price Objections
In the end, price has to be justified in the prospect’s mind. But as a selling professional, it is your job to give the prospect the required rationale. You can be prepared and do the job in advance, or you can answer price objections for the rest of your life.