Overcoming the price objection
Matt Lynch is national sales director of LYNKA Promotional Products. John Lynch is president of LYNKA.
Price is the number-one objection when it comes to sales. It is encountered in almost every sales process, and if you can't overcome the price objection, you shouldn't be in sales.
Too often we hear salespeople say "We didn't win the order because our price was too high." They treat the price objection as an end point to the sales process, while, in fact, this is where the selling begins.
Price negotiation is in the Polish blood - there must be a negotiations course in grammar school, because every single sales meeting we go to, the client asks for a discount. And too often the salesperson gives in, starts to back-pedal and then offers a lower price - all this, just because the client asked for a discount. Sometimes they even make the worst mistake of all: "I have to check with my boss."
In this article we will give you some pointers on how to overcome the price objection. There are no guarantees that this will work every time, but it should increase your chances of winning the sale.
Always be prepared
Since we know the price objection is coming, why not have a good answer ready? The reason why most salespeople struggle with objections is that they don't do their homework. In every business, there are a limited number of objections you will encounter. So why not start writing them down and then create the best possible responses to them?
Objections are good - they actually mean the client is listening and interested in your product and service. Objections are simply requests for more information. When you go into a furniture store and ask "How much does this sofa cost?" it means you are interested or at least curious. The same goes for your client.
When the price objection is raised by your client, it can come in several forms:
- "Your price is too high."
- "We have a limited budget."
- "Your competition is cheaper."
Most salespeople respond with that famous one word answer: "Quality!" We respond with another one word answer: "Amateur!" (You thought we were going to say something else, didn't you?) Unfortunately, if you are using the quality line, chances are your competition is using it too. So this path doesn't differentiate your product or service at all, and you are still left with the higher price. Your answer requires more depth and more creativity. It must also be compelling.
Acknowledge the objection
Do you know anyone who wants to own the cheapest car, the cheapest computer, the cheapest corporate gift? Do you brag that you have the cheapest apartment, the cheapest new sofa, the cheapest insurance policy? Sure, price matters, but in most surveys price comes in fifth place in terms of importance to the buyer. You need to find out what the first four motivators are for your client!
When the client says your price is high, just listen. Don't agree with him, but by acknowledging the objection, you will tell the client that you are listening and you understand her concerns. Try to disarm the client - often this is where clients feel they have to battle for the lowest price. Show him that you are on his team: "Well, if price is so important, let's see if there's a way we can save you money on your order..." A good lead-in comment can be "I understand that price is important; what are some of the other factors that are important about this purchase?"
Best value for money
At Lynka, we tell our clients that "we are not always the cheapest, but we always represent the best value for money." This helps to point out the potential costs of paying too little. "I know that you can find cheaper items out there, we can find them also, but will they accomplish the goals of your promotion?"
I am sure that retail space in Galeria Mokotów costs more than retail space on some back street in Praga. If clients were only looking for the cheapest price, then Galeria Mokotów would be empty. But it's not - it's packed every day with thousands of shoppers. How do they sell their space? Not by offering the best price, but by offering the best value for your money. Selling is about value, not price.
Room to negotiate
Quite often, your price is not that much higher than the competition's. Determine if your client is using price as an excuse not to buy, or really needs a discount. Ask them for more information: "You mentioned that our price was too high, can you be more specific?"
If you must lower the price, be prepared for give-and-take. There are always some areas that you can negotiate. Offer lower price for better payment terms, for example. Quantity discounts are also good: "If you buy 2,000, I can give you a lower price." If you are selling a service, maybe there are seasonal discounts that you can give, or reward the client with a lower price for a longer time commitment. You should be familiar with your company's offer and know when you can be flexible.
Whatever you sell, the most important thing is that you have a strategy for handling the price objection. Don't be in such a rush to offer up a discount. Don't be a salesperson who believes the only way to be successful is by offering the lowest price. Instead, be a sales professional - prepared with simple, thoughtful responses to the price objection. You'll succeed by overcoming objections, selling value and winning loyal clients.
