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Of course, price objections run rampant and are certainly here to stay. However, I believe sales people need to understand, and more importantly; help their prospective customers understand the difference between price and cost.
Is it the Price or the Cost?
The next time you get that objection on the price; before you go off arguing about pounds and trying to justify and defend your price, and before you start to lower the price; find out exactly what the prospect means. As an example…
“Like I said, it all looks great. But that’s too much right now. That’s a lot of money. I mean can you do something about the price?”
“Steve, you’ll have to help me. I’m not sure what you are referring to. When you say it is too much, are you referring to the PRICE or the COST?”
“Uh…What do you mean? What’s the difference?”
“Well Steve, the difference is that if you are referring to the price, that is the actual amount of money that I am going to charge you, our fees, and such, that is one thing…and frankly, our price is quite fair. Yes, we are a bit higher than our competitors are, but we decided long ago that is was better to explain a slightly higher price once, rather than make excuses for poor service and merchandise over and over.
However Steve, if you are referring to the COST…then I agree with you 100%! You are right. The cost is high. That is the cost of you losing money every day in the factory due to the inefficiency of the inventory system. Yes, the cost is high when you are losing £320 every day because of outdated technology. Steve, as I thought I demonstrated, you are throwing away over £7,650 a month! Yes, that is too much!”
It’s About Value
The price is merely what is on the invoice. The cost is what the prospect looses by NOT having what you sell. Help the buyer understand that the COST is always much higher than the price.
MTD Sales Training
(Image by Arvind Balaraman)