In the world of sales, objections about pricing are commonplace. Prospects often use ‘your price is too high’ as a negotiating tactic, putting sales professionals in a challenging position. How you navigate this situation can make the difference between losing a prospect and closing a lucrative deal. We explore the common pitfalls and effective strategies to handle objections related to pricing, in the context of sales management.
Understanding the Objection
When a prospect asserts that your price is too high, it’s essential to resist the immediate urge to defend, justify or dive into discounting. Instead, take a moment to understand the root cause of their objection. Respond with questions such as:
• Can I ask what makes you say that?
• How are you coming to the conclusion that we are too expensive?
• What/who are you comparing us to?
By initiating a conversation around their perception of value, you gain insights into their expectations and concerns. Benjamin Franklin’s adage: “The bitterness of poor quality remains long after the sweetness of low price is forgotten”, underlines the importance of emphasising value over price.
When the Price is Truly a Barrier
In some cases, prospects may genuinely be unable or unwilling to meet your pricing. It’s crucial to recognise when your offering doesn’t align with their budget or needs. If a prospect insists, “That’s still too expensive; we cannot afford that”, respond empathetically: “I hear you and unfortunately, it sounds like we’re not going to be the right fit for you.”
Walking away from prospects whose budget or priorities don’t align with your pricing is a strategic move. Focus your efforts on prospects who appreciate the value you bring and can afford your services. By doing so, you free up valuable time and resources to focus on prospects who genuinely appreciate the value you bring and can afford your offerings. Choosing to disqualify opportunities that don’t match your pricing not only safeguards your profit margins but also allows you to invest efforts in cultivating relationships with clients who understand and respect the true worth of your product or service. In the long run, prioritising value over volume ensures sustainable success and strengthens your position in the market. As Red Adair wisely noted, “If you think it’s expensive to hire a professional to do the job, wait until you hire an amateur.”
The Discount Dilemma
When faced with a direct request for a discount, avoid knee-jerk reactions. Unlike shopping at a supermarket where discounts might be possible, offering discounts in the professional realm can erode your profit margins and diminish perceived value. Salespeople often discount when they lack confidence in the value they provide, struggle to justify the price or if discounting has little impact on their earnings. The key is to resist the temptation to discount without gaining something valuable in return.
Negotiating Value for Discounts
If you find yourself in a position to negotiate on pricing, always seek something in return. Instead of merely offering discounts, propose mutually beneficial terms. For example:
Prospect: “I need a discount of X to get the deal done.” Answer: “We don’t discount, but if you can commit to seven-day payment terms and introduce me to three people in your network, I can push for this. How does that sound?”
This approach ensures that any concession you make is reciprocated with value, maintaining the perceived worth of your offering.
In conclusion, mastering objections about pricing involves understanding the prospect’s perspective, recognising when a prospect isn’t a good fit and negotiating concessions that add value. Remember, the goal is not just to close a deal but to build long-term, mutually beneficial relationships with clients who appreciate the value your product or service brings.
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