Lowering prices or throwing in add-ons is often not the best methods to respond to price objections. Although all sales involve negotiation, using these tactics overlooks the reasons behind most price objections which is, in the prospect’s eyes, the value is not quite at the level of the outlay required to obtain a deal. Great sales people use the three tactics below to respond to price objections without cutting into margins for their organizations or their own commissions.
Great sales people respond by looking for a cause behind the price objections
A great sales person who has spent enough time with a prospect to know he or she is committed to moving forward with a deal and has the support of his or her organization knows enough to suspect that price objections are really masking another reason for hesitating on signing a contract. Follow the lead of great sales people in dealing with these price objections and dive deeper into why a prospect may be raising price as a reason for not moving forward:
Ask the prospect whether the product or service as presently defined is what the prospect and his or her organization is looking for. This can help the prospect reflect on value for price and realize that the price shouldn’t be an objection.
Find out whether the prospect has the full support of other decision makers, or if there may be a key decision maker who is not convinced. When this is the case, you can arrange a meeting with the hold outs to overcome the price objections.
Ask whether the prospect has found similar value for money anywhere else. Price objections are sometimes the result of competitor offers, and knowing whether or not the prospect is working with one of your competitors can help you explain where your offerings differ and provide a better value.
Great Sales People Find Out Whether Price Objections May End the Deal
Once great sales people have explored all other avenues, if the price objections remain it is possible that the objection to price can cause the prospect to walk away from the negotiations without making a purchase. It’s crucial for great sales people to find out whether this is a possibility before the prospect begins to distance him or herself from the deal. Great sales people handle this by:
Asking whether it’s the price or the product/service which is causing the prospect concern. Occasionally prospects think of an additional feature or functionality that would be nice to have or even a must have at this late stage, and this may be easily solved.
Finding out whether it is the price or the terms that’s the real problem. Less established companies or those emerging from recent business combinations may need longer terms, which can be less expensive to negotiate than price.
Great Sales People Put Price Objections in a Different Perspective
Big ticket sales cause pressure for prospects, especially if a prospect is worried about how his or her organization will react to the changes that a product or service may introduce. In other cases, it’s only the number that a prospect is worried about. In either circumstance great sales people help prospects overcome price objections by putting the price in a different perspective relative to value using tactics like amortizing the price and creating timelines that compare the price against the potential gains in revenue or margin. Using a combination of all of the above tactics, great sales people are rarely stymied by price objections.
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