How to Respond to Pricing Objections
It’s probably the most common stumbling block that salespeople come up against, so how do you deal with price objections? Let’s explore a few ways…
Ah, the dreaded price objection. Everyone in sales has come across them at some point. If you’re not particularly sales-savvy, the temptation may be to immediately give in to discount requests, or to give up selling to someone who objects on price. However, neither of those tactics is particularly good for business!
The crucial thing you have to remember here is that “that’s too expensive” or “I can’t afford that” may sound like an open and shut case at first, but actually can mean a lot of different things. So let’s look at how to deal with pricing objections, and what prospects might really mean when they tackle you on price.
If you stay silent for a brief moment after the prospect’s initial objection, they may start to open up and explain their position a little more. This gives you the opportunity to directly address their issues without any excess prodding. A brief moment to spur them into explaining themselves is enough, don’t go creating any overly awkward silences!
“How does this problem currently impact your bottom line?”
Depending on what you’re offering, it might be worth reframing the offer within the prospect’s current situation. How are they currently dealing with the problem that you could solve for them? How much of a drain on their resources is this problem? Is there a potential monetary value to the time or effort they could save? Could it potentially cost them more not to buy? Are there any hidden costs or risks within their current way of doing things?
These kinds of questions help the prospect to grasp the true value of working with you; value is crucial here. If they are hung up on the price, they may not be looking at the bigger picture. Focus on building up the value in the prospect’s mind to match the price quoted.
“What are you comparing our price to?”
Find out their frame of reference with regards to pricing. Have they purchased a product or service like yours before? Have they researched the market? They may simply even have an arbitrary figure in their head! If they’re genuinely unaware of pricing within your industry, they may benefit from a frank discussion about the value you provide for the given price, and maybe also some guidance about how pricing in your industry works.
If the person has done a bit of research or has purchased a service like yours in the past, find out exactly what they looked at or bought in order to check they aren’t comparing apples to oranges. Make sure you aren’t being incorrectly compared and that the prospect isn’t making any unfair assumptions.
If the prospect is working from a competitor’s price, this might present an opportunity for some competitor research. If they’re happy to share, ask what amount they’ve been quoted and specifically for what. You can then move on to cover the unique benefits of your offering – without badmouthing the competition of course.
“Is it budget or cash flow that’s holding you back?”
Prospects sometimes say that they can’t afford a product or service without establishing whether it’s a cash flow or a budget issue. Some may favour paying in instalments (which would help with their cash flow) where others may respond well to a discount (which would help with their budget).
Establishing payment plans may be a great bargaining chip for your salespeople when dealing with people who have cash flow issues. With regards to those who would prefer money off, consider how you can scale back your offering to provide a “budget” version for those who can’t afford the higher price point. When you reduce a price, you should also reduce what’s on offer.
Negotiating down on price without reducing the offering may communicate that your prices are always negotiable, or that your product isn’t actually worth the ticket price. It’s also unfair on your other clients who are paying the full amount.
“Let’s boil the price down to a monthly/weekly/daily figure.”
Initial knee-jerk pricing objections may be simply that the total lump sum price has caught them off guard. Breaking it down into a monthly, weekly, or even daily cost might help the prospect understand that the outlay isn’t quite as scary as they first thought.
Taking this tack can work well when you also refer to how this problem is currently impacting them; for example “For just 68p a day you could avoid (insert undesirable outcome or effect here)”.
“Imagine that money was no object…”
Restate the crucial points of your offering and ask them whether they would choose your offering if they did have the funds available. This will help establish whether they’re genuinely a good fit for what you sell.
If they would still choose you, head back to look at their status quo. What could they stand to lose from not taking you up on the offer? How are they currently dealing with that issue themselves? Establish the value that you would provide to them and how your product/service would make their lives easier.
It’s also worth noting whether money is truly the only thing that’s holding them back – if they have other objections to your offering, this gives you the opportunity to either put their minds at ease or to establish whether they would truly benefit from what you’re selling.
“Are you looking to buy (product/service) on price alone?”
Though many people are looking for quality and reliability above all else, there will always be a small subset of the population who will only respond to “race to the bottom” type pricing – both in consumer and business markets.
The key here is to ensure that you’ve communicated the true value of what you’re selling. If that’s still not good enough, then it might be worth simply accepting that they’re only after the lowest price on the market.
If the prospect is a business, it may be worth asking the question whether their own offering is the cheapest on the market. This might come across as a little cheeky, but it can help them realise that their own pricing model isn’t a race to the bottom either!
If they genuinely can’t afford what you’re offering…
Some people genuinely won’t be able to afford what you’re selling, and that’s fine. In that case, always be pleasant, maybe offer to send over some supplementary information, and never try to push the issue once you are sure it’s a “hard no”. You may give a bad impression of your company if you’re too pushy – the prospect may not consider you in future!
If they’re just not sure
Offer to follow up in a few days/weeks/months or to send them some information to consider. Many prospects do genuinely require a bit of patience. Remember that not everyone will always be clamouring for what you sell and may need to take time to mull it over. Any sales contact should be considered an opportunity to build a relationship, not to close a sale.
Speaking of building relationships with your prospects, keeping tabs on your sales and marketing conversations is an important aspect of attracting new business and keeping existing clients happy. FIVE CRM provide a comprehensive platform that helps your sales teams keep track of communications with leads, nurture relationships, analyse behaviour, and boost engagement.
For more information on FIVE CRM and telesales click here
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