Overcoming price objections: How to turn bellyachers into believers
Monday, November 10, 2014
What do you say when they say you're too expensive?
That's a vexing question for those who fear and fight the idea of price objections. For all too many business professionals, questions about their price cause anxiety at best, and a conviction that they have to cave in and slash their fees at worst.
Estimates are that 90 percent of sales professionals at some point offer to lower their price before they're asked to do so.
Business owners who play games with their price or futz with their fees at the first hint of resistance ignore a basic reality: price objections are a buying signal. Prospective customers have to be at least somewhat interested in your products and services to question their price.
Price queries, or even protests, may be a prospect's signal that he or she wants to keep talking. And objections provide you with an excellent gauge for your pricing, according to Harry Beckwith, the author of "Selling the Invisible."
"If no one complains about your price, it's too low. If almost everyone complains, it's too high," Beckwith writes. "How much resistance tells you your price is right? Fifteen to 20 percent."
How do price objections come up in the first place?
Jeffrey Gitomer, in his book "Knock Your Socks Off Selling," notes that customers object to your price when they ...
- fail to "see, perceive and understand" the value of your product or service
- can buy the product or service cheaper elsewhere
- don't want to buy from you or your company
- are not convinced yet
- can't afford it
Price negotiations are no time for original thought. That's why service providers should memorize and share, at a moment's notice, a list of reasons why they're worth their fee.
Fee "justifiers" can include things like their ...
- specialties and expertise
- awards and other recognition
- clients: who they served, and how
Another way to they can justify their fee: explain how they save clients time, money and headaches.
Keep the following ideas in mind the next time you talk price with a prospect:
- You can set and get any fee if you can differentiate yourself from competitors who charge less.
- If a prospect says you're "too expensive," she means that you're not a priority right now. Your mission: Educate her as to why investing in your service should be a priority.
- If someone calls your rate "too high," say: "Too high compared to whom? Too high compared to what?" Establish price parameters.
- Compare apples to apples. When you're told a competitor's bid is less than yours, make sure there's a fair comparison of everything that both firms offer.
- A "breakdown" can prevent a breakdown. Avoid an impasse by calculating the price in small chunks, such as cost per use or cost per week.
- Procrastination is a kind of price objection — and the feel-felt-found strategy is one good way to overcome it. Say: "I understand how you feel: the idea of buying a new kitchen now is scary, because it's expensive. Other clients felt that, too. But they found that buying now helped them immediately reduce energy costs, lock in lower prices on materials and labor, and enhance the value — and eventual resale value — of their homes."
- Put competitors' prices into perspective. When all else fails with penny-pinching prospects, use this fabulous fallback: "We have no problem with those competitors who charge less than we do. They alone know what the value of their services is worth."
No company is immune from price objections. But business professionals can minimize the impact of those objections by attaching a value to who they are and what they do, demonstrating the return they offer for the investment they receive, and promoting themselves as well as their firm.
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