“Your price is just too high.” Six words that drive salespeople to the brink of insanity. Learning to handle the price objection is one of the greatest challenges in professional selling. You cannot avoid talking price, but bring it up after the prospect has had the opportunity to appreciate the real value you are offering. Be prepared to justify your asking price and show that it is fair. Here are four ideas to help you handle the price objection: postpone the price objection; use the lowest common denominator; employ the presumption of exclusivity; use comparison.
• Price is not really the issue until you understand the needs of your prospects. You must determine their needs and then establish the value of your product from their point of view. Therefore, the price objection should be answered near the end of the presentation, after needs, value, and benefits have been discussed. If it comes up early in your presentation, you could postpone by saying something like this:
“I can appreciate that you would be interested in price, and I assure you we will discuss it completely, but before we even consider the price I want to be sure that my service can satisfy your needs.”
Should the prospect absolutely insist that you answer a price question immediately, then by all means do so. You do not want to risk the question remaining in his mind to block out everything else that follows.
• Another approach is to use the lowest common denominator. This technique involves breaking down the price by reducing it to a figure that is easy to comprehend. For example, you might say,
“$2,000 does seem like a lot of money to spend on a stereo system until you consider how often you will use and enjoy it. With our extended payment plan, you can listen whenever you want for just 75¢ a day. Less than the price for a pack of gum at a convenience store.”
If your prospect is really concerned about the absolute price, then a logical response is to reduce it to a monthly, weekly or daily figure. Instead of having prospects deal with the total cost today, have them evaluate it over time.
• What can you do when the price for your company’s product is higher than being asked by a competitor? Employ the presumption of exclusivity and stress those features that are exclusively yours. Analyze your competitor’s offering to see why the same product has a lower price. If your analysis indicates that you are offering more, then your task as a professional salesperson is to drive home those exclusive features. Go out of your way to isolate other needs of the prospect for which you can provide assistance. Show more interest in your prospect than your competitors. Identify your superior advantages and convince the prospect that the extras can be obtained only from you. In other words, justify the price with facts. Determine what the prospect wants more than anything else from your product and then identify the features that satisfy those wants. Concentrate on those features until prospects feel that only with you can their needs be completely satisfied.
If prospects give you a hard time about price, stop selling price. Show what the money buys. Sometimes a price objection represents an incomplete sales job. You may want to use a statement that begins something like this:
“I appreciate the opportunity to make a more complete presentation. Obviously, you must have a reason for looking exclusively at the dollar side of this proposal. Let’s review the value you will be receiving…”
Draw the picture clearly and convincingly. Sell quality and exclusivity when the prospect argues price. If you sell the exclusive features properly, the prospect is not even thinking about price by the end of the presentation. Thank them for giving you the chance to do a better selling job. Most buyers are fair minded if you show why your company must get the price it is asking.
• A fourth approach is the use of comparison. Be prepared to present logical reasons for the price you are asking. One way you can do this is to compare the quality of your product to that of the prospect’s company – stress that both of you are selling superior products. Understand and be able to apply the differential competitive advantages you have in product, source, people, and service superiority. Pit quality against quality. Acknowledging the superior nature of your prospect’s product and suggesting that his company and your company are two of a kind makes considerable sense. This approach elevates your product to the same level of pride the prospect’s company has in its products.
If you choose to make comparisons, be sure you have facts to substantiate your claims. Case histories and testimonials are useful for this purpose. For example, a case history could show how another customer decided to use less expensive materials that did not perform satisfactorily and resulted in a costly shutdown in production. Compare the downtime loss with the prospect’s situation. High-quality materials that will not shut down production should be worth a bit more than goods that might cause recurring downtime. A demonstration could also work effectively to show a comparison. Let the prospect see personally how your product compares to other alternatives. Visual evidence and verifiable case histories produce powerful comparisons, regardless of what you are selling.
Success in handling the price objection depends in large measure upon your attitude. Remember that few purchases are made on price alone. A low price is probably low for a good reason. You generally get what you pay for. If competitors’ prices are lower, they are cutting their costs somewhere with lower standards of product quality, service, delivery, or whatever to make up the difference. The common law of business balance prohibits paying a little and getting a lot. Ask your prospects to consider adding something for the risk of buying that cheaper product. And if they do that, they will have enough to pay for something better – your product or service.