Handling Price Objections: If you’ve ever been in sales, then you know that one of the most common objections you’ll hear is about price. It’s only natural for buyers to want to get the best deal possible, but as a seller, it’s your job to handle a price objection and close the sale.
I remember when I was first starting in sales and I would hear the dreaded price objection from prospects. I didn’t know how to handle it and would often just give in and lower my prices. This obviously wasn’t sustainable or profitable long-term. Over time, I learned some strategies for dealing with price objections that helped me close more deals and make more money.
In this blog post, I’m going to share with you a few tips for handling price objections like a pro so that you can do the same in your business
How to Handle a Price Objection
Pricing is an important part of the sales process for both businesses and customers.
Many buyers will inquire about pricing for several reasons:
- They need to know how much budget to reserve
- They’re shopping for the lowest price
- They’ve learned the first quoted price can be negotiated
- It’s a natural instinct
A price objection doesn’t mean the prospect won’t buy. How you handle the price objection will determine how successful you are as a salesperson.
So, the first thing you need to do is find out why your prospect is inquiring about your pricing.
It’s important to listen to the entire objection to get a clear understanding of the issue. Only after you’ve heard everything should you start to look for clues as to what the real objection might be. This will help ensure that you’re able to address the prospect’s concerns effectively.
Next, ask permission to explore the objection further. This shows your respect for them and that you truly do want to help them.
If you don’t get permission, you may be faced with a brick wall.
After you’ve addressed their objections, you can reiterate their reasons, making sure you understood them correctly. After that, you can assure them that you completely understand their point of view.
Lastly, you can show them the value of what you have to offer.
What you’re offering has a lot of value, and that’s what this post will show in more detail.
Sales reps hear this common objection to their sales pitch so often that it makes up half of the total.
Sales reps face the number one objection of price nearly every day. For big-ticket items in B2B, 50% of objections may sound high, but it is still the main obstacle sales representatives encounter.
We all get those emails or phone calls where someone says they’re interested in your product, but the price is just too high. What kinds of discounts can you offer them?
Many reps are tempted to give discounts to close a sale, but it’s not always the best idea.
After all, if your product or service really offers value, then even a prospect who pays full price will reap the rewards.
Offering discounts or haggling on prices can be okay, but you shouldn’t start there.
When a prospect expresses a price objection, the best thing to do is clarify the value of your service and re-emphasize the time, money, and energy that the prospect will save by working with you. By doing this, you can help the prospect see that your service is worth the investment.
Handling Price Objections: How to Talk About Price
If you’re struggling to overcome a price objection, try this method.
Step 1: After your prospect is done talking, hit the “mute” button and wait three seconds.
Step 2: Ask three questions to explore the price objection.
Step 3: Summarize their pricing objections in a few sentences.
Step 4: Circle back to your product’s value.
Here’s an example of responding to a price objection.
Prospect: “We like your product, but we think it costs too much.”
Rep: *Silence*
Prospect: “The other option we are considering is 10-15% cheaper than yours. Can we talk further about possibly bringing your price down?”
Rep: “I completely understand where you’re coming from. I’ve had two other customers who felt the same way about our price. But what they discovered was that…”.
Price objections are a common occurrence in sales. Many prospects have learned that pushing back on cost will usually result in a discount.
It can be difficult to respond to a pricing objection if you’re not willing to lower your price right away. Discounting may have its benefits, but too much of it can ruin your margins and make your product seem less valuable.
Handling Price Objections: How to Convince Buyers of Your Value
When making large investments, it’s understandable why entrepreneurs are wary. There are way too many examples of companies spending a lot of money on strategies that fail to meet their goals – or are even unprofitable.
While your product or service may clearly benefit the prospect, they may need more persuading. However, the issue isn’t about price, but about value.
Don’t focus on the price of your service, but rather on how it will benefit and save money.
Here are three reasons you shouldn’t immediately start haggling for a better rate.
- Negotiation may lead clients to expect to be offered more discounts on future purchases.
- If negotiations go poorly, it could damage your current relationships.
- While negotiating, you may accidentally lower the value of your product or service.
From my experiences in sales, consulting, and building sales teams, I would say that the worst thing that can happen is to set a precedent that you’ll negotiate on all future deals and that you’ll need to.
Like drugs, you get used to lowering your prices every time.
If your services offer significant value to your clients, then there is no reason to negotiate.
When negotiating, always make sure you get something out of the deal. This will ensure you’re being recognized for your value and that you’re not taken advantage of.
According to Robert Cialdini, author of Influence: The Psychology of Persuasion, people often feel obligated to return a favor.
If you want others to feel indebted to you, then you must be willing to give first. This could mean giving information, free samples, or a positive experience. By doing so, people will be more likely to reciprocate and give something back to you in return.
When negotiating, it’s important to get their agreement or commitment to your terms before discussing yours.
Instead of saying, “I can give you a 10% discount”, ask, “If I can get X price, can you give me Y?” This will make them commit first even if you’ve already gotten the approval for the discount.
Also, take note that saying “I’ll ask my boss” may not be the best route to go. It’s much easier to argue that company policies didn’t allow for a certain discount rather than your boss not allowing it.
What can you ask for in return when offering a price discount?
- Better contract
- Introduction to other influencers
- Discounts for using their product or services.
- Endorsements or testimonials
If you have no choice but to negotiate, be sure that you are negotiating with a decision-maker so that you don’t have to negotiate twice.
You’ve probably given your pitch, and there’s nothing more you can do to sweeten the deal.
“Sorry, the price is too high”.
It is frustrating to hear that after all that effort. After working on the deal for several days, you don’t want to lose this customer just because you cannot agree on a price.
Discounting your services may seem like a quick way to close the deal, but in the long run, it has a huge impact on your profits.
Instead of offering a discount, try to focus on the value of your product. Explain to the customer how your product can benefit them and solve their problem. By doing this, you can show the customer that your product is worth the price.
Most salespeople face this common obstacle in their sales process. Some simply give up, but others have learned to creatively overcome it.
Do you remember the times when you thought of not purchasing a product due to its high price? But then suddenly the sales rep talked you into buying?
Words are powerful. It’s all about how you present yourself to persuade your prospects.
Conclusion: Handling Price Objections
If you’re selling products or services, then you know that a price objection is a common obstacle to overcome. But with the right strategies in place, you can master the art of handling price objections and close more deals. By being prepared ahead of time and knowing how to respond effectively, you’ll be able to win more business and make more money.
