Thursday, January 16, 2014

Overcoming the Four Top Pricing Objections in a Complex Sale

Overcoming the Four Top Pricing Objections in a Complex Sale

The most common objection that you will come across in any sales deal is pricing. The prospect will always, without exception, attempt to bring your price down. Your job, as a top salesperson is to find out why the prospect is objecting to the price. Once you have this information, you will gain the ability to minimize or eliminate the loss that you would have to suffer by allowing for a discount.
Essentially, there are four reasons why prospects voice price objections. Let take a look at all four of them one by one, as each requires a different response.

1. The Prospect Is Placing Insufficient Value On Your Product.

In this case, your prospect has failed to understand the full value that your solution holds for their organization, or more likely, you have failed to adequately communicate this value. It’s time to go over each of your solution’s value points again. Point out each and every single way that this solution will save money or generate profit for their company, especially in the short term. Sometimes, the person who you are bargaining with might not have been present when you went over this information the first time. If this is the case, it is your job to fill them in until they understand.

2. Your Prospect Is Making an Inaccurate Comparison.

In some cases, your client may have a false idea regarding the value of your solution because they are mentally comparing it to a similar solution, which nevertheless has a very different value. For example, you might have sold them a particular software package in the last quarter for $3000, but you are attempting to sell them a different software package this quarter for $7000. By the mere fact that both products are software packages, the client may feel that the second price is too high, even though the practical applications of the two are very different and the second one delivers a much higher value. If this is the case, you need to tell the prospect carefully why the second product is in fact worth far more than the first. Again, you should be explicit regarding how much money this product is likely to save or generate for them in the near future.

3. A Competitor Is Offering a Lower Price.

Usually, if a competitor is offering a lower price, this is because their solution does not actually do everything that yours does. In this case, you need to simply make sure that you are familiar with your competitor’s solution to the point that you can explain to your prospect exactly what makes your solution worth more to them. Make it clear which money generating or money saving features your product / service has that your competitor’s does not.

4. They’re Just Trying To Cut a Bargain.

This is by far the most common of the four. In this case, your client is fully aware of the value of your solution but is trying to bring the price down anyway just to cut costs. The best strategy for this kind of objection is to refuse at least three times before granting a discount. Then, when you do grant the discount, require that the prospect give you something back in return; perhaps a higher volume sale or an earlier closing date. You should never give away something for nothing.
The key to being successful in this process, is identifying which of these four types of objections you are dealing with, and the easiest way to find this out is to simply ask your customer. If they are reluctant at first, stay persistent until you receive an answer. If they still refuse to tell you why they think your price is too high, you are probably dealing with objection #4, in which case you can proceed as we’ve suggested.

What other objections have you seen? Leave a comment below.

This post was inspired by the SalesRoundup Podcast episode titled “Overcoming The Sales Price Objections!”
Good Selling
Mike & Joe
SalesRoundup Podcast