Dealing with price objections is one of the biggest hurdles that our sales training partners deal with on a consistent basis. Salespeople representing high quality providers must be skilled in handling buyers who always want a deal. Fierce competition, online discounters and a troubled economy can make us nervous to say no. How should you handle this objection?
“Your competition is willing to sell me their product, which they say is very similar, for a lot lower than you. So what are you going do for me?” Every buyer will word it differently, yet the message is the same. Lower the price or run the risk of losing the business. In a tougher economy, this possibility will even make seasoned veterans nervous. Who’s bluffing, telling the truth and being sincere about their claim and motivation?
If you are dealing with this objection as a Salesperson representing a high-quality provider, then you may not have done the best job of representing your company from the outset. When is the best time to fight an objection? Before it occurs! Do this successfully and you will take away much of the power of the price objection because the buyer may not choose to voice it to you. He or she may counter it in their own mind without having the need to bring it up. Even if they do, knowing how you will respond may cause them to them to be more accepting of your explanation.
All smart Salespeople know that selling the merits of value is always the best way to fight a price objection. Your positioning and timing are crucial in best dealing with this. Here’s what your buyer is telling you:
Buyer: Look, I like your product. If I didn’t, we wouldn’t be having this conversation. I just can’t justify your pricing when your competitor is willing to sell it to me for much less than you.”
You: “Our product has excellent value. Quality is what we stand for. That’s not just what we say – read our testimonials on our website or talk to someone who has purchased our product and they’ll tell you that it’s worth the price because it’s an investment.”
Here’s what your buyer is saying to the competitor:
Buyer: “I’m considering your product, but I’ll be frank, I’m concerned about the quality. How can I be assured that you’re selling me something of good quality?”
The Competitor: “Our product has excellent value. Our clients are happy with the quality and its affordability. We work hard to get your business and understand that in a tough economy, you need every penny to count.”
Being a buyer is a lot easier than the job of Salesperson. All buyers are interested in getting the best of both worlds. They want quality that meets expectations and a price that is justifiable. They don’t want the lowest price at the sacrifice of quality below minimum standards. Say this to yourself before you start any price discussions with a buyer. If he or she didn’t want the quality you offer, you wouldn’t be negotiating. The tricky part is knowing the limits of pricing and quality expectations in the client’s mindset.
Imagine the boss walking into the buyer’s office and asking who was the rocket scientist who ordered a product that failed to work properly when it was most needed? Gee, but it was such a great deal. The price on that unit was way lower than the competition. How much does the wrong buying choice actually cost?
Plant the seed in the mind of the buyer early that your company stands for quality, not the lowest price. Every business category has higher quality/higher cost providers. Competitors position themselves as being able to offer a much lower price for similar quality. “Similar” is debatable and needs to be determined in the mind of the buyer.
Here’s what higher quality companies believe in. Choose the phrase you like best and customize it to your personality and communication style:
We would rather explain our price to you once, than make up for poor quality in your mind forever.
No one wants to buy a product twice because the first one failed to meet expectations. That’s an expensive decision that no one wants to be responsible for.
People tend to feel they paid too much when the product they bought was below acceptable standards.
No one complains about price after they’ve bought a product that surpassed expectations.
I personally don’t like to associate myself with a product that people think is average. I sell great products that brings repeat business and referrals.
Would you rather get the lowest price on an OK product or get a fair price on a great one?
In the end, no one wants to make the wrong decision on the right price. Our clients would rather make the right decision on the right quality.
If you can’t justify what we charge for our product, then I’ve failed in my job to educate you.
Don’t expect a buyer to agree with you. While that may occasionally happen, the most common reaction you’ll receive is a blank look from a client who listens and says nothing. You don’t need to hammer the point home repeatedly. Deliver it once before a negotiation starts and you will have dramatically increased your odds of making a sale.
This is one my favorite sales techniques. It’s a rare occasion when you can turn a price objection into a reason to buy. While your first reaction may be that it doesn’t apply to the product you’re selling, get creative in customizing it to meet your needs and client situation. Here’s an example using any product with high use application.
Your product: $500, 30 applications, cost per application – $16.67 per
Competitor: $250, 10 applications, cost per application – $25.00 per
Which product is more expensive? While yours may appear to be twice as much, the competitors is one and a half times as expensive per application.
You may also use this as an upsell opportunity using the same price and application breakdown for your product:
$500 for a three-month supply, cost per application (30): $16.67
$750 for a six-month supply, cost per application (60): $12.50
$1,000 for a year-supply, cost per application (120): $8.33
“By ordering a year’s supply, you can reduce your cost to far under $10 per application.”
Sit down with your Sales Manager and work together to create examples that apply to your products, services and clients. It’s basic arithmetic that is extremely powerful!
Top-performing Salespeople fight price objections best by consistently prospecting for new business, growing the sales volume of their current account base and maintaining a high activity level of sales activity. Here’s a fact that all experienced Salespeople will attest to:
You will always be at your best ability to negotiate and deal with objections when you are exceeding your sales targets.
When your confidence level is high, your desperation to take a bad deal is low. You are selling at peak efficiency – Now Do What It Takes To Stay There!
How do you best deal with price objections? Please share your comments in the area below. If you liked this post, please share it on your favorite social media platform.
Thanks!
Dave Warawa – PROSALESGUY
For starters, what does "quality" mean in radio advertising sales? What if your "quality" is NOT better than the competition?
Well, I got an email saying that you responded to my post, but I don't see a response. I'm new here.
Hi, Mike! Thanks for commenting on my article. Quality in radio advertising sales can refer to many things. Quantity of audience, quality of audience, quality of commercial writing and production capability and quality of the Salesperson providing expertise.
Be careful of quantity of audience should your market be measured by ratings. Selling on the being the #1 rated station is a dangerous benefit when suddenly you're #3. Qualitive information shows the calibre of people listening to your station.
Perhaps, your station has great writing and production skills. That carries great influence in the selection of station by buyers.
And Media Salespeople should always remember what they bring to the table for value-add in the way of service levels, commit to professionalism and expertise. Too many of us give away our time and don't place a value on it with our clients.
Be creative on building your quality statement in your client's mind by taking stock in what you and your station have to provide.
A great tip from the RAB today related to this subject:
DAILY SALES TIP
Let the prospect talk
Sales strategist Colleen Francis
When you encounter objections, be quiet. Don't jump in right away with questions, because if you interrupt the person who is explaining their objection or you try to pounce with answers, you'll look defensive. The prospect may interpret that as you trying to justify or defend a position, and that can get their hackles up.
If your prospect says to you, "Your price is too high," or "I'm not the right decision-maker," or "We need more time," don't panic. The sale isn't drifting away. Instead, give that prospect enough room to talk and give yourself an opportunity to listen carefully to what they are saying.
In the vast majority of cases, the prospect will feel compelled to jump in and give you more information. In many cases, they'll even answer their own objection within that little vacuum of silence!
Listening is defintely a skill that needs to be mastered. My problem with some salespeople is they allow themselves to be drawn into a game of ping pong. Give me an objection, I'll give you a response. I teach my sales people to accept no more than three objections. If your prospect has more than three objections, you haven't done a good job making your presentation, you have an unqualified prospect, or you're not a good fit.
I totally subscribe to the Pam Lontos sales technique that answers the objection with, "Mr. Prospect, if I understand you correctly, your objection is my price is too high. If I can demostrate to you that our price is fair, are you prepared to move ahead with this schedule today?" You have to sort out the prospects who are lying to you.
Mike, I agree with your ping pong analogy, needs to be avoided because that is game playing and not really partnering to find a solution both can agree on. I had a situation this week where a roofing contractor was "set" on the dollar amount he was willing to spend to expand into our market. It was a referral from one of our other stations in a neighboring market and he is located between the two metros.
My station prices are triple that of my sister station and he knew what he wanted schedule wise so it wasn't a match.
But during the conversation he also mentioned he was spending $500 to $1000 each week on Facebook which he was happy with the ROI.
So, next week, we are going to discuss how to expand his digital advertising and I'll show him options that are scalable to his original "radio budget of $1500 per month" but the starting price will be $5,000 a month. He may not spend that much with me initially, but he’ll see what is possible and why.
Thanks for your comments, Mike and Scott. Here are Five Success Skills that I've used throughout my radio sales career. They are the foundations of what we advise to our sales training clients and the basis of our book SHUT UP! Stop Talking and Start Making Money.
1. Ask Great Questions - Many Salespeople tend to talk too much. Asking great questions is the basis of consultative selling. Great Questions = Great Answers.
2. Actively Listen - This goes beyond waiting for a break in the conversation to make your selling point. The great power of influence is listening. Let the buyer dominate the conversation with information on their needs and feelings.
3. Paraphrase - Repeating the client's words and feelings back to them in your words provides communication clarity. If I understand you correctly is a phrasing framing technique. This links emotional intelligence to sales intuition - a quality of great Salespeople.
4. Summarize your Client's Full Needs - The Master Paraphrase of everything that is important in the mind of the client. To do this, you have to practise Skill #1, #2 and #3.
5. Project a Positive Personality - Have fun. Be postive. Enjoy the communication. We are communicating, not performing open heart surgery.
As you can see, this is 100% client focused. You aren't talking about your station, how great you are or your latest promotional concept. That's what other Salespeople do. The start of building a relationship is all about learning about the client and his or her world.
