Sound Sales: Price Is Rarely the Real Objection
In sales, you have probably been told at some point that nothing will kill a deal faster than allowing a prospect to learn the price of a product or service before they appreciate its benefits. There is certainly an element of truth to this statement. If your prospect doesn’t understand your product or service, or is not able to comprehend it as an investment rather than a cost, you are probably headed down the wrong path. It is important that you get used to thinking about your products and services as an “investment”. It is also important to use this terminology with your clients… your products and services are not a cost, they are an investment. They’re investing in your solution.
Price objection is the easiest excuse a prospect can give you and is often their number one defense mechanism. However, it is hard to be sure if price is the real reason for their hesitation. When the prospect gives you the price objection, behind the scenes, the following may really be happening:
- They are hiding another reason for not buying.
- Your solution is more costly than their current problem.
- They want assurances that they are paying a fair market price.
- Your competition is really in the driver’s seat and you are only being used as a bargaining chip against them.
There is a big difference between price objection and price resistance (negotiating.) A real price objection means they may be interested, but your price does not justify them solving the problem. Negotiating occurs when the prospect is going to make a purchase, and you are in the final stages of hammering out the details. During this stage, they will work to get as many concessions as possible before signing on the dotted line. The best way to determine if you are facing price objection or simply negotiating is with one pointed question.
Mr. Prospect, is price the very last issue that is keeping you from making this purchase?
If your prospect says yes, obviously you are simply negotiating terms. They understand the problem, they know they need to solve it and they are just trying to get the best price possible. If they say no, the real objection is not price. In reality, they don’t understand the value you are providing or they are thinking that living with the problem is less expensive than investing in your solution.
When is the best time to talk price?
I believe it is in the salesperson’s best interest to get price, money and all budget issues out on the table early in the selling cycle. I would rather be debating price with my prospect early in the process before I have too much time and energy invested in the deal. If the money issue is still on the table late in the deal, chances are the prospect may have the salesperson trapped in a very compromising position.
Even though it is wise to discuss price early in the selling cycle, you must first establish the prospect’s pain – which is the most compelling reason or reasons you have an opportunity to do business with them. They have a problem and your solution is an investment.
A problem is costly, a solution is an investment.
Before fully opening the discussion about price, the best things that can roll out of your mouth are questions – especially situational questions. Your goal at this point is to help your prospect discover the cost of their problems – not tell them what you think the costs of their problem are. All problems, have both a hard and soft cost. Naturally, the hard cost represents obvious, tangible dollars. On the surface, the soft cost would be conditions and situations. However, beneath the surface, financial ramifications can be uncovered, which justify moving forward.
Most selling professionals never uncover the soft costs. Often, the soft costs can be more compelling than the hard costs and can provide a greater leverage when the prospect is analyzing cost of the problem vs. cost of the solution.
Only after they understand that their problem is more costly to live with than purchasing your solution should you open the discussion about price. The moment money is on the table the weighing of price vs. the value of your solution begins. Remember, prospects don’t buy products and services. They buy solutions. Too often salespeople think they have lost a deal due to price. However, the real reason was that the prospect did not see the value of the solution.
Keywords: Sales Tips, Selling Tactics, Price, Selling Solutions, Sales Professional Development, Sales Leadership Development, Sales Management Tips, Sound Sales, Sales Consulting, Compass Group Solutions, Mark McGlinchey
:: Back to the Top ::
Home | Sales Evaluation | Management Index | Compass Forum (CF) | Revenue Room | Facebook | Book | About | Contact© 2012 All Rights Reserved
Website design and
by Steven C. Welsh
COMPASS GROUP SOLUTIONS
Indianapolis, Indiana | (317)442-6774
E-Mail Compass Group Solutions