2 Quick Responses To, “That Costs Too Much!”

Short and sweet; here are two quick but very powerful responses to the age-old reply of, “That costs too much!” The responses are a brief summary of each concept as you can add you own flavour and style. However, I think you will get the main gist of the ideas immediately.

#1 – Compared To What?
This is a great question that will momentarily silence and even confuse the prospect. But it does what it should do and that is to help the prospect get back to reality. Usually, the prospect can only compare your product or service to your competitors’. In which case, you should have dozens of reasons and value building statements (which you should have already presented long before you began discussing price) prepared and waiting.

In the case where you have a relatively unique product, then the question takes on an even more powerful role. Just what is the prospect comparing your costs to? A house? A car? A pint of beer? What?

Prospect
“That costs too much!”

Sales Person
“As compared to exactly what, Steve?”

Prospect
“Ah, um, I’m just saying it costs a lot, that’s all.”

Sales Person
“I understand. I’m just trying to figure out what you are using as a reference to compare my prices to?”

Another response is: “Exactly what do you mean by that?” or “What do you mean by too expensive/costs too much?”

It does exactly the same thing.

#2 – Are You Referring To The Cost Or The Price?
This is a classic, and also makes the prospect stop and rethink their knee jerk comment. Is the prospect referring to the actual ticket price, the sticker? Or are they talking about the cost effect; the value of the product or the result of not having the product. It usually looks something like this…

Prospect
“That costs way too much!”

Sales Person
“Are you talking about the cost or the price, Sarah?”

Prospect
“Uh? What’s the difference?”

Sales Person
“Well, if you are talking about the price tag, it is in line with the market. Of course we are slightly higher than our competitors, but the value and warranties, as I explained, make it more than worth it.

Now, if you are referring to the costs, as in the money you are losing every day in your plant due to a lack of sufficient monitoring; or the costs as in the time and money you spend every month on inventory losses; or the costs as in the thousands of pounds you throw away every year in having to reorder lost product; then YES! I agree with you…that is too much!”

If you did a reasonably good job during your sales interaction, you should almost get insulted when the prospect says it’s too much. If however, you did not do your job well, then perhaps it IS too much.

Happy Selling!

Sean

Sean McPheat
Managing Director
MTD Sales Training
http://www.mtdsalestraining.com

(Image by James Barker at FreeDigitalPhotos.net)

Is It A Price Objection Or Sticker Shock?

A price objection is one thing. However, if you reveal your pricing and ask for the order, then after a comprehensive sales interaction, the prospect responds with a state of disbelief; you have a much bigger problem.

The Molehill Really IS a Mountain
In a price objection, of course, you failed to build enough value. However, if the prospect is truly surprised or even shocked by your price, you failed in many foundational sales areas:

You did not…

1. Properly unearth the prospect’s problems and pain
2. Properly expose the need
3. Help the prospect to understand the validity, costs and importance of the problems
4. Properly build the value of the solution
5. Convey creditability in you and your company
6. Gain the prospect’s trust

No Objection
What most sales people do at this point is turn to their “rebuttal book,” and begin to try to overcome the price objection. Please understand that at this point, there is no objection. There is no objection because there is no valid offer. There is no valid offer because the prospect does not see a realistic solution to a legitimate problem. There is no objection because the prospect does not even have a real consideration on making such a purchase.

The Missing Link
The main thing for you to do if you are so unfortunate to be in this self-imposed predicament, is to go back and try to find out what you missed. Ask questions. Dig deeper into the problems and properly expose the need.

Then assign a real monetary value to the problem: What does it cost the prospect NOT to have your product or service? What do they suffer or lose?

Don’t Keep Changing the Tires on the Car…Fix the Hole in the Street!
Also, please note that if this sticker shock or surprise happens more than extremely rarely, you have a fundamental problem in your sales interaction. There are essential ingredients missing in the foundation of your sales structure. (This of course, is assuming that your pricing is reasonable.)

Instead of continuously trying to combat so-called price objections and eventually drastically lowering your price all the time; go back to the proverbial drawing board and redesign your sales interaction.

Price Objection = Build value
Price Shock = Start over

Happy Selling

Sean

Sean McPheat
Managing Director
MTD Sales Training
http://www.mtdsalestraining.com

(Image by FreeDigitalPhotos.net)

Price Objection? Is It The Price Or The Cost?

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…

Prospect
“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?”

Sales Person
“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?”

Prospect
“Uh…What do you mean? What’s the difference?”

Sales Person
“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.

Happy Selling!

Sean

Sean McPheat
MTD Sales Training

(Image by Arvind Balaraman)

The Proper Way To Reduce Your Price During The Close….But Only If You Have To!

Offering a discount to help motivate the prospect can often be a powerful inducement to close a few more sales.  However, dropping your price in the wrong way will cost you a ton of lost sales, it will reduce your margins to nothing and in addition you could lose the prospect’s trust and respect and possibly damage the credibility of your company.

The Steps to a Price Reduction (In the right way!)
Offering a discount is a delicate issue and you should only use it as a last resort.  However, when necessary, follow these steps:

1. Stand Firm 3x

2. Build Value 3x

3. Reduce the Price for a Valid and Justifiable Reason

1.     Stand Firm 3x
After you have offered a price and attempted to close on that price, you have to understand that you cannot just arbitrarily change it.   Once you made an offer, you must stick to that original offer and price as long as possible.   If you change or reduce your price too quickly, then what was your first price? Was the first price just a way to see how much you could get?  Stand firm on your original price, and close on it at least three times, before even thinking about a discount.

2.     Build Value 3x
As you are closing on the first price, continue to raise the value of the product or service.  Remember, price objections are actually about value, not money.  Continue to increase the value and costs of the prospect’s problems and pain. Raise the value of the original offer at least three times.

3.     Reduce the Price for a Valid and Justifiable Reason
Now, you are ready to slightly reduce the price, but only for a good reason.  You must have some justification to lower the offer.  If the prospect feels that your price drop is nothing more than the stroke of a pen, it becomes worthless.   Find valid reasoning and reduce the price as if it is your money that you are giving away. So you can drop the price by 10% but what gives? Also, this is also a great place to get referrals.  You can essentially buy the referrals from the prospect, offering the price reduction in exchange for contacts.

  • Stand Firm 3x
  • Build Value 3x
  • Reduce the Price for a Valid and Justifiable Reason

If you reduce the price incorrectly, you reduce the value along with the price.  If you price drop as above, you will raise the value as you reduce the price.

Happy Selling

Sean

Sean McPheat
Bestselling Author, Sales Authority & Speaker On Modern Day Selling Methods

MTD Sales Training

3 Ways NOT To Handle The Prospect Who Is Shocked By Your Price

You went through the entire sales interaction without much problem.  However, as soon as you mention the price, the prospect, noticeably stunned, slips into a comatose gaze, and a look that says, “Are you kidding?!”

As mentioned in, “3 Ways To Handle The Prospect Who Is Shocked By Your Price,” when the sales interaction fails to uncover problems and pain or build value, there are but a few steps you can take to possibly save the sale.  However, here are three things you should not do, in this situation.

The Three DON’Ts

#1.  Don’t Try to Justify the Price
The only way to justify the price is to rationalize and defend the price, which only further diminishes the value.

“Well, our pricing is in line with the industry…”

 “Our price is lower than most of our competitors…”

“Due to the economy and oil prices, our costs go up…”

“Sticker Shock” at the end of the sales interaction is not a reaction to price; it is a matter of value and likely a failure of several steps in the sales process.

#2. Don’t Begin Discounting the Price
Do not lower the price!  Changing the price or the offer at this point only proves the prospect was correct in that your price was outrageous.  Sadly, some sales people justify the price and discount it at the same time; driving the value of their product and company into the ground.

#3.  Don’t Agree
Many sales people like to agree or empathise with the prospect in this situation.  This is a mistake.  There is a time to agree that your price is high, even to brag about your high rates.  However, that is only when you have built the value to where the prospect feels it is significantly higher than the price.   If the perceived value is so low that the prospect is shocked by the price, then do not agree.  Don’t use statements like:

“Yes, it is high, Mr Prospect, but everything costs more these days.”

If you routinely get prospects that feel your pricing is extraordinarily high, understand that you have more than a pricing problem.  In fact, you may not have a price problem at all.  Conversely,  you probably have very serious problems within your sales process, your sales interaction, and in building value.

Before I sign off, here are some more tips on becoming a great sales person:

Happy Selling

Sean

Sean McPheat
The UK’s #1 Authority On Modern Day Selling
MTD Sales Training