Discussing Price

Customers will always complain about price. Indeed, price resistance is the most common objection salespeople will encounter and can be the hardest to resolve. However, as with other types of objection, understanding why the customer is objecting and turning that objection into a need can be an effective way of managing the resistance.

Understanding price resistance

Everyone wants to find a good deal and feel like they are getting a good price. However, objections about price are sometimes used as a convenient reason to object, but are really a smokescreen to mask other issues. In these situations, it is important that you question your customer to determine what the underlying issue really is. At other times, however, the objection truly is all about price. In instances where the buyer is making his or her decision on price alone, there may be little leeway for negotiation, and you may choose to walk away from the relationship.

Preempting the objection

If you have undergone a thorough needs determination, when you make a recommendation your customer should not be surprised or shocked about the price. Needs determination should include a discussion of what the customer is currently paying or expects to pay. Questioning the customer about their budget or pricing guidelines will help you recommend a price that is close to what is expected. If the customer won’t answer your questions, give them a “sense of” cost: “Just so you know, a program like this typically costs $100. How does that sound?” You will quickly find out whether this is a long way from what they expect to pay.

Resolving price objections

The objection-resolution process is your best tool in dealing with price objections. Firstly, acknowledge the objection as you would any other, for example: “I know you are trying to keep costs down.” Next, get the customer talking. Ask questions, and find out about any other offers they have had from your competitors—how do they compare to yours? Are the deals comparable with yours in terms of the value delivered? Learn as much as you can regarding how far off you are in price from other offers.

When resolving price objections, reframing the objection is critical. Do everything you can to turn your customer’s objection into a need, using phrases such as: “So if I understand you correctly, you need to know what you will get for the additional 10 per cent,” “My understanding is that you need to know why we charge a bit more than Company X and why it’s still in your interest to buy from us…,” or “It appears to me that you need to feel comfortable with your decision to pay us more than some of our competitors…”

If the customer agrees with your reframe, go ahead and address the need. Give it your best shot, and see if they will accept your point of view. You will be surprised at how an objection often turns out to be less significant than it originally appeared to be.

Lowering your price

The last thing you should do is lower your price without taking something off the table. If you provide a quote and a customer objects, and you then subsequently drop your price, the message is clear—you were charging too much originally. This sentiment can have serious negative impact on further business and your customer’s perception of you. If you do have to lower the price (which happens), let the customer know what you have to remove or reduce from the original proposal. As a last resort, let them know you are lowering the price to earn your way in, but that the original price was fair and this is a short-term offer that you will not repeat.