Who is afraid of the big, bad price?

Last month, we offered a webinar on objection handling. Over 500 sales professionals from a multitude of industries and companies participated. As the session opened, the following question was posed to the audience: What objection do you most fear from your prospects? The response, named by 75% of the participants, was PRICE.

The price objection is likely to come up during most sales cycles. Certainly in the current economic environment, no one wants to pay more than necessary for any product and service. In addition, buyers are more educated than ever before. They are savvy. The alternatives facing them are plentiful and no one wants to over pay or be taken advantage of. That said, we don’t need to drop our price to win – nor do we need to be afraid of discussing the price or cost of the products and services that we offer.

The lowest price alternative is not always the best alternative.

There are a number of strategies that can be used to effectively handle the dreaded objection regarding your price.

A well-executed sales process will develop the value of your products and services before the price of your products and services enters the discussion. Often, sales executives discuss the price of their offerings way too early. Price becomes the center of the discussion which typically leads the sales person at a disadvantage.

Order takers tell price then ask: “How many?” Sales professionals discuss “What is it worth?” and then ask “When?”

There is no reason to be afraid of the price discussion; here are eight tactical tips that can help you be prepared to handle the objection that is sure to come up at some point:

1. Your price is always a function of your deliverables and your terms and conditions. It is difficult to discuss price before you have come to an agreement on what they are going to get and what are the terms associated with those deliverables. Be sure not to throw your price out too soon, before you have solid agreement on what the prospect needs and wants.



2. Value and price are not the same thing. The value is the impact of your offering on your prospect’s business or life. Value is always determined by the customer – not the sales person. It is important to a successful sales cycle to have the value discussion and fully understand the impact you can have on your prospect.



3. Most people want to negotiate. Have you built that into your sales process? Do you fully understand what concessions you are empowered to offer, situationally, to close the business. There are often trade offs, compromises and embellishments that can substitute for a discount and offer extreme value to your prospects.



4. Sell first – negotiate later. I have often observed sales people drop price information as a way to qualify the prospect. One of the single most fatal mistakes made by sales professionals is to drop the price too early. If the prospect isn’t sold, the price of the offering is irrelevant. If the prospect is sold, then we can balance the price with the value and it is the sales person’s role to make sure that the value side of the equation outweighs the price or cost side of the equation.



5. Differentiate your solution. It is not enough to tell the prospect why you are different. They need to require the differences and be willing to pay incrementally for those enhanced capabilities. One question to always be ready to ask when the price objection comes up is “Compared to what?” The answer will give you tremendous insight to the prospect’s state of mind and what competitive alternatives you are being evaluated against.



6. “It is too expensive,” is often the easiest way for a prospect to dismiss and avoid the conversation with a sales professional. Be sure that the objection you are addressing is real and not just a brush off to buy the prospect time.



7. Be prepared. It is amazing that this is the objection that many sales people fear, know is coming, yet are unprepared to address and manage in the conversation. If you are a higher priced alternative, be prepared to defend your price with the value and impact to the prospect in their terms. If you have managed the sales process effectively and discussed value, this will be easy. If price is being discussed first thing, you will have to negotiate for the time to develop value in the conversation.



8. Believe. If you don’t think your products and services are worth it – neither will your prospects. Look at your own bias and understanding of your products and services; be sure to understand the value you bring to the businesses and individuals that you work with. Be convinced yourself before you can convince anyone else.

The bottom line is that consumers and businesses will purchase the products and services they value. Those purchases don’t have to be the cheapest – they just have to be worth it. Ask yourself if you know as much about the value you bring to your prospects as they know about your costs. If the answer is no – you have some work to do in your sales cycle to bring that information and knowledge to a level that has parity.