Like most of us, you have heard (and uttered) those five dreaded words more than a few times. It’s the most common objection encountered in every industry, and the most difficult to overcome.
Disagreement over price doesn’t have to be a deal-breaker. Consider the issue from the customer’s point of view, treat their concerns with respect using this five step process. The result may be long-term profitable relationships with new as well as established customers.
Talk it over
Before sending the client anything in writing, talk about price. Verbalizing what you think the price will be before sending a proposal can significantly reduce the chances that price will kill the deal. If they object, this gives you the opportunity to deal with the issue up front and face-to-face. In avoiding this discussion, you lose the opportunity to verbalize the justification for your prices. Just sending a written estimate may result in losing the opportunity to state your case.Be 100% sure
Is your price the best you can offer? Do your homework. Research your competitors’ equivalent products and prices, your customer will certainly have done so.
Sometimes a price objection is a cover-up for a deeper concern. Approach that discussion by saying, “We can certainly address the price, before we do, let me ask you, price aside, what else is on your mind?” This method puts all the issues on the table.
Don’t assume anything
When most people are told their price is too high, they make the immediate assumption about what “too high” means to the client. “Too high” is a subjective comment. Before you start thinking about counter offers, take a deep breath, pause and look at your client. The silence may encourage the client to elaborate. If not, come right out and ask what precisely they meant.
What does “too high” really mean?
Start by acknowledging the objection and appreciating the fact that the client shared it with you.
The worst thing you can do is to become defensive in justifying your prices. Instead say, “Too high?” and wait for the client to fill in the blanks. You’re acknowledging the validity of their objection and turning the conversation toward a solution that will benefit both parties. By being straightforward, you stand a better chance of finding out exactly what the difference is between your price and the figure the client has in mind.
Listen, respond, and if need be, move on
Listen to the answer the client gives you. Most sales people are good at asking questions, only the best are masters at actually listening to the response. After the client has answered the “Too high?” question, say something like, “If we can’t get our price down to that level, does that mean there is no chance that we will go forward?” This establishes beyond a shadow of a doubt if the customer is making a decision based solely on price or whether other factors will influence their choice.
You can’t and won’t sell to everyone. You have to be prepared to walk away when the client isn’t willing to pay a fair price. Your business must be able to make a reasonable profit in order to thrive. If you have been fair and reasonable in dealing with the customer, you may very well receive the call you have been hoping for: the client that told you the deal wouldn’t work because of price gives you a call and say’s they’re ready and willing to do business.
Louie Bernstein walks you through exactly how to handle the price challenge in this short video.