Is it the Price or the Cost?

How to Overcome the Price Objection

I’m surprised so many sales people still have problems with objections on price. The reason is that when you hear, “Your price is too high…” it is really not about Price; it is about “Value.”

When the prospect objects to your price, they feel that the value of the product or service is LESS than the amount of money you are asking. So, how do you handle this objection at the close? Well, if you’ve done your job properly - you don’t! This is something you have to do throughout your entire presentation.

The sale will take place when the prospect feels the value of the product is equal to or higher than the cost. Here are three quick ideas on building more value. Don’t try to overcome the price objection: avoid it!

1. Be proud of your higher price.
2. Is it the Price or the Cost?
3. Build the value of processes and people

Be proud of your higher price - Your prices are higher because the value of your product is higher. If you have higher prices than your competition, don’t hide it; boast about it. Then back it up with better quality and service.

Help the customer understand the difference between the Price and the Cost.

Example:
Prospect: “That’s high! It’s too much.”

Salesperson: “Are you referring to the PRICE or the COST?”

Prospect: “What?”

Salesperson: “If you are referring to the price; the amount you pay me right now, then yes; it is about 12% higher than our
competitors. However, if you are referring to the cost, that’s a different story.

Prospect: “What do you mean?”
Salesperson “The cost is the Total Value of doing business with me and ABC Software. The cost is that our programs prevent
intrusions from beyond the firewall, saving our clients hundreds of thousands of pounds a year. The cost is that our
system has NEVER been breached; while our nearest competitor’s systems are compromised once a month. The cost is
the money your business loses when you have to shut down all of your overseas operations for two days due to failed
security. Yes, our price is a little higher, but when it comes to cost—they have us beat!”

Now, this is not an off-pat answer.

It is to help you begin to think differently about the price objection. Also, remember the golden rules for selling anything: You must first uncover a problem that exposes the need, then present the solution to the problem and finally ask for action. When you uncover all the problems that you solve, they should add up to be a whole lot more than the cost of the solution.

Build the value of processes and people behind your product or service.

Sales Person: “As you can see, we make our primary gears out of titanium while others use regular metal. Of course, this costs more,
but we know that the highest quality parts, makes for the highest quality engine.”

Another example

Sales Person: “All of our service people are MCSD Certified. That costs us a lot more, but we also have the finest service record in the world.
We felt it was better to explain our higher price one time, rather than have to make excuses for poor service over and over.
Don’t you agree?”

If you build enough value in your presentation, the prospect should be thinking that the cost is significantly higher than it actually is; they should think your real price is a bargain!

The equation to eliminate the price objection: Value over Price equals sales!

Happy Selling!

Sean

Sean McPheat
Managing Director
MTD Sales Training

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Hi

Don’t worry if you come up against price objections - in my book it’s a sign of real interest. Here are some things to consider around handling price objections.

INFORMATION
Make sure your prospect has all of the information to really understand and value your products and services.

DON’T AGREE
Don’t agree that your product is more expensive than your competitors if your client has told you that it is. You know the reasons why it is more expensive but your client probably does not - you need to compare eggs with eggs!

DISCOUNT AHEAD!
Your prospect may be fishing for a discount when they come back with a price objection. It’s just another way of asking “Can we do a deal?”

GO OVER YOUR USP AGAIN
When a price objection is raised go over your USP’s once again. Confirm all of the benefits and quality and support this with case studies of companies who thought the same as they did.

SHOWING TOO EARLY?
A major reason why you might be coming up against price objections is because you are showing your price too early in your sales dialogue.

LAYER THE VALUE
When you the build the value of your product you must make the client think that the product or service is going to be at least 50% more expensive than what you tell them it is.

PRICE MIGHT NOT BE THE ISSUE
Whilst the prospect says price is the issue it could really mean something else. When they say “It’s too expensive” respond with “What do you mean?”. You might be able to help with method of payments, timings, budgets, finance etc. You never know until you ask!

Until the next time, take care of yourself and happy selling!

Sean Mc

Last week I was asked to run an "Objection Handling" workshop for a company and I replied with "I don’t do objection handling courses".

I don’t believe in them. Here’s why…

If you get an objection you haven’t actually asked the right questions and listened to the answers up front. It’s your job as a sales person to cut the objections down before they even appear.

I mean, come on - you know what’s coming!

You should know what they will object to so prepare for it and cover it off by asking qualifying, investigative and need identification questions up front.

Think about what an objection means for a moment…

It actually means that what you have talked about or covered is not providing sufficient value/benefits for your prospect. There is no excuse for not covering this off before any objections arise.

View objections as a question…

"It’s too much money" - this really means that you have not convinced me that the value and the benefits will outweigh what we have to pay for it.

"Jo Schmo’s product does more than yours" - you have not highlight the benefits properly and what it means to your prospect.

"I’ll think about it" - I’m going to over what you said and make a decision. You should ask them "What specific areas do you need to think about the most?" And then you provide more evidence and info around those points.

So, in closing:

Ask better questions and listen carefully and the objections will not come. You know what is around the corner if you do not cover off the objections before they arise.

If objections do arise, don’t beat yourself up about it.

They client needs more convincing that your product or service is right for them.

Until the next time, take care of yourself and happy selling!

Sean Mc

3 Useful Objection Handling Tactics

When it comes to down to it, the way that you deal with your objections will either make or break the sale.

Now I know that you are dead busy so here are just 3 useful objection handling tools and phrases that you can start to use right now!

TACTIC # 1

SAY OTHER, "BIGGER AND BETTER" COMPANIES THAN THEM HAD THE SAME PROBLEM/OBJECTION

THEY SAY:

"I could see that element of your product being a problem for a us"

YOU SAY:

"Big Company Ltd (name drop to build credibility) thought exactly the same as you are right now. They used that particular part of the product to increase their revenues by a further 15% by doing XYZ"