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I’ll bet you thought that when a prospect says “Your price is too high” they are saying that they don’t want to pay your price or they can’t afford what you’re selling.
Not at all.
When a client or a prospect says “Your price is too high” what they are really saying is “I don’t understand how this will make me money or save me money.” In other words, they perceive that they will be giving more in money than they will be receiving in value.
Sales Professionals Make Price a Part of Their Sales Strategy
Sticker shock is a common reaction. It’s only human to want to get a better deal and to have a price objection no matter what the price. And that’s why sales professionals make price objections a critical part of their sales process.
Remember, a price objection (or the desire for a lower price) is really just a front to other objections. It’s on you to understand what your price your prospect is looking for and what what features, benefits and values they are willing to pay for.
Here are a few tips for having the price conversation with your prospects and customers.
Anticipate the Price Objection
The first step to eliminating price objections is to acknowledge that they will be there. I’m not sure why any sales person prays and pretends that the prospect will not say anything about the price.
Seriously, unless you are giving your product or service away for nothing, your customer will complain about the price. So expect it. Prepare for it. Plan for it and add it to your sales presentation.
The great thing about preparing for pricing objections is that you can sit down, brainstorm a list and prepare for the conversation. Here’s a list of sales objections and how to handle them.
“This is expensive compared to what your competitor is offering.”
This is a terrific opportunity to explore what alternatives your prospect is considering and why they see you as the more expensive alternative. Here are some questions you can ask prospects if they use this common sales objection.
- What other alternatives are you considering?
- What is it about this less expensive alternative are appealing to you?
- What actual price are you interested in paying?
Another terrific way to be prepared for this objection is to create a comparison chart with your offer compared to your competitors offers.
“Can I have a discount?”
You know the old saying “If you don’t ask, you don’t get.” So they are asking.
Rather than offering a discount straight up, here’s a different response. Follow up their question with this one: “Which parts of this offer are you willing to let go of?” Think of this as a research question. Explain that you don’t do discounts and that you’re happy to eliminate certain elements from the offer. The key to this is to know what to eliminate and what to keep.
“Do you offer payment terms?”
When a prospect mentions payment terms, they are interested in your offer. Their main reason for asking is that they may not have the cash up front.
“This isn’t in our budget”
Don’t put off talking about price to the end of your presentation. Instead, make the size of their budget a qualifying question.
Don’t be ashamed of your price point! Be clear about the level of investment required and, most importantly the return on their investment. Show clients how using your product or service will actually generate revenue.
Eliminate Pricing Objections By Including it In Your Qualification Conversation
The best way to eliminate objections to pricing is to address them upfront. That means asking your prospect about their budget and how much they were looking to invest in a solution.
Focus on the bigger picture. You and your prospect are on the same side. Your goal is to answer their questions first thing. In most cases, the buyer is looking for a solution that will meet their needs in the long run.
Too often salespeople wait to address pricing until the end of the sales process. This wastes everyone’s time. Instead, take the time to ask your prospect the following:
- What are your biggest frustrations around…
- When you think about…what’s most important to you?
- Have you tried any other solutions to overcome these problems?
- What benefits are you looking for from a solution?
- What is your budget that you have allocated for this solution?
With that information in hand, you should know whether or not your product or service will help solve their problem.
Let’s assume that the budget they stated is below the price of your product or service. If that’s the case, then keep reading. This is a sales tip very few people practice.
Quantify Exactly Where Your Product or Service Saves and Makes Money
If your product or service didn’t offer real value, you wouldn’t be in business. So take the time to quantify specifically where and how your product or service saves time, saves money, improves productivity, eliminates costly tasks, improves quality, etc.
Dig deep inside your product and service features and uncover exactly where and how it impacts your customer’s costs. Here are a few places to look:
- If your product is a machine or software: look for how many “transactions” or tasks your customer will be able to do within a specific period of time.
- If you are a professional, consider the alternatives of NOT getting your advice or using your service. For example, an estate planning attorney may consider how long it takes to go through probate and pay those costs compared to having a set of wills and trusts.
- If you are a freelancer who specializes in tasks or software tools, think about how long it takes your potential client to do that task themselves and how much their time is worth.
Find Out What “Your price is too high” Means to Your Prospect
These days the internet offers every customer nearly perfect information. So when your prospect says “your price is too high”, take a breath and ask a question right back.
“When you say my price is too high — what do you mean?”
Then just sit back and listen. They might bring up a competitor and talk about some features they have. They may talk about your product or service and be concerned that they won’t use all the features that are offered.
Find out what’s at the root of their pricing concern and see if you can eliminate features to meet them where they are.
Under no circumstances should you negotiate the same level of features or services for less money.
Ask your customer questions and have them do the math
If your customers are always saying that your price is too high, then take the time to understand their processes and where their time and money goes. Here are a few sample questions you can ask:
- Tell me about how you are currently…
- How long does that take?
- Are there other people are involved in that task? How many?
- How often do you do this?
- Do you ever have to go back and fix mistakes? How often does that take? How long does that take?
- If you didn’t have to ____ what would you be doing?
Your questions might vary slightly, but this is the general gist of the questions you want to be asking.
You’ll also want to have a general idea of what this person’s hour is worth. For example, I typically use a number like $100 per hour. For some, that number is much more and for others it’s a little less. But it’s an easy number to use.
With the answers to these types of questions, I might say something like “Let’s say that an hour is worth about $100. How much does this process cost you today? This is where I have them actually do the math themselves on a piece of paper. Don’t skip this step because it’s insanely powerful.
It’s Time to Get Excited About Pricing Objections
If you dread having the pricing conversation, hopefully, these tips have given you some practical and simple ways to address them. Remember, pricing objections aren’t objections to price, they are a real objection to a lack of information.
As a sales person, your job isn’t to push your product or service on someone. Your job is to match your prospect with the best possible solution. Pricing objections are the best way to truly understand what matters most to your customers and how much they are willing to pay for it.