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)

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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)

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There Are Really Only TWO Sales Objections In The Whole World

I imagine the title of this piece not only grabbed your attention, but also caused a bit of confusion or even shock. First, let me clarify exactly what I am saying.

There are only TWO objections that exist. That’s all; just two. They come disguised as dozens of other issues and appear to be tons of objections. My contention however is that there are but two real objections, and understanding this will help you close more sales today.

The Concept
Please understand that I am not trying to raise a big debate on this issue. I just want to help you see things from a slightly different point of view. To help explain, I will use the following analogy, although it is not a perfect one.

You have a visit with your doctor. Perhaps you are ill, or have even just gone for a preventive check-up. In either case, the physician performs a thorough examination. The doctor then diagnoses problem, if is there is one. Finally, the doctor prescribes a treatment plan to solve the problem and cure the illness.

The Objections
Now, think about this question: What reason can there be for you to object to the doctor’s prescribed solution? Why would you reject the doctor’s treatment? As many ideas may come to mind, if you look carefully, there are really only two reasons:

1. You do not totally agree with the doctor’s diagnosis or
2. You do not agree with the doctor’s prescribed solution or some combination of the two.

Disguises
Trust: You might say that the reason you object is that you do not trust the doctor. Ok. That means that you do not trust his or her diagnosis. You do not believe the doctor is qualified and therefore the diagnosis is suspect.

Price: Perhaps it is a “price” objection as you feel the doctor’s remedy is too expensive or time consuming. You do not believe the prescription is the best one. Once again, you do not agree with the prescription.

Urgency: You object because you would rather wait as you do not feel the situation is as urgent as the doctor claims. Again, you do not believe in the diagnosis.

Sales Objections
Of all the objections you may get, if you drill down, you will see that they fit into one of two categories:

1. The prospect does not fully believe in your diagnosis of their problem/need or
2. The prospect does not believe in the solution to the problem/need

More Disguises
Competition: The prospect objects, due to the competition or that they are happy with their current supplier. In such a case, the prospect does not believe that they are better off with you. They do not believe that they will suffer or have a problem without you—they do not believe in your diagnosis.

On the other hand, with a competition objection the prospect may believe in the problem and the value of the problem, yet does not feel that your solution will solve it, and therefore chooses to stay with the competitor.

Price: First, realise that a price objection is NEVER about price; it is about VALUE. The price objection clearly states that the prospect feels that your solution is not worth solving the problem. The buyer feels that the problem is simply not as bad, urgent or as costly as you claim and therefore the solution costs more than the problem. The prospect does not agree with the diagnosis.

The Real Point
Of course, I can go one for pages with all sorts of examples to prove this idea, but please understand that such is not the point. I am not trying to prove anything or get into debates on the issue.

My point is to get you to THINK more BEFORE you REACT. My point is to simplify some of the overly complex rhetoric out there and help you to see things more clearly.  Don’t be so quick to jump into that big book of canned rebuttals and off-pat answers to objections. Don’t be so quick to accept that price or economy objection, when the truth is that you just did not do your job.

Dealing with today’s modern buyer, you have to look below the surface, and more importantly, you have to look within!

Happy Selling

Sean

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

(Image by FreeDigitalPhotos.net)

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How To Handle The Price FIRST Prospect

Two minutes into the sales interaction, the prospect is demanding to know the price. You do what you can do avoid divulging the price too soon, but the prospect insists. If you sell a product or service were you must put together a quote, and it will take time to do so, that helps. However, when you have exhausted the usual options and answers and the prospect remains adamant on knowing the costs right away, here a few tips you might try.

As always, what follows, are concepts, not scripts.

#1 – Do you normally make decisions this way?
Simply ask the prospect if they normally make important decisions in such a manner. That is, do they usually make decisions BEFORE they have ALL of the necessary information? Be strong and embarrass the prospect on asking you to “cut-to-the-chase” on such an important issue.

Sales Person
“Steve, I understand and appreciate that you are anxious to know what our program will cost. But let me ask you; do you normally make decisions BEFORE you have all of the information regarding that decision?”

Then, after whatever the uncomfortable answer, perhaps…

“Steve, if you’ll just give me just a few minutes, I will give you all of the information you need, including the price, so that you can make a well-informed, intelligent decision. Does that make sense?”

#2 – Compared to what?
Since you have not been able to give the prospect the information about the product or service, then how can the price have any real meaning? If I told you I have a house for sale and the price is £50,000, what would that mean? Unless you have details about the house, the price is irrelevant.

Sales Person
“Sarah, my point is that whatever price I give you right now, what do you compare it to? If you are thinking of comparing it to what you get from your present supplier, I can tell you that what we deliver is not quite the same. If you would like to compare “apples-to-apples” then I ask you to allow me to first explain exactly what WE will do for you. Is that fair enough?”

All money is not good money
Be careful with the price ONLY or price before presentation prospect. Often, even if you give in and divulge the price prematurely, AND close the deal, usually you will end up with a nightmare customer. Work with clients who are worthy of YOUR quality business. Be a professional.

Happy Selling!

Sean

Sean McPheat MTD Sales Training

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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)

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4 Powerful Reasons To Walk Away From The Price ONLY Prospect

Invariably, as a professional sales person, you will run across that prospective customer who is only concerned with the price. I am talking about that buyer who can only see how much the product or service costs and nothing else, including quality, service, longevity, reputation, or even the value of YOU.

This prospect usually leaves you with only two options:
1. Lower yourself, your company and what you offer, to the level the prospect demands
2. Walk away

In my opinion, in most cases, you should walk away from the price only prospect (P.O.P.) and here are just a few reasons why.

#1. No Loyalty
You may close the deal by giving away your shirt, your commissions and company profits, but you will not gain a legitimate client. The minute someone else comes along with a seemingly lower price, this customer will leave. In the interim, they will play you off your competitors and essentially use you like a discount coupon.

#2. Too Much Work
In doing the above, this customer will usually demand more of your time and resources for even less. This prospect will want additional products, services and add-ons and not want to pay anything for them. This customer literally wants something for nothing.

#3. Negative Word-of-Mouth
While positive word-of-mouth can be a great asset, negative talk about you and your company can prove devastating. The problem with that POP is that no matter what value you deliver, no matter how well your product performs or how well you service the customer, if the price is not right, they will see no satisfaction. This customer then spreads the word that you and your firm are not a good company to deal with.

#4. Set the Standard
You dropped your proverbial pants to close the sale with the POP. However, now that POP, talks about how much they paid for your illustrious services. Now, you run the risk of running into other prospects in the same industry or target market that know just how LOW you can go. You can become known as the “cheap one.”

Depending on exactly what you sell, such issues may not be very important. However, if quality, service, value and personal commitment are important factors in your business, then you may want to walk away from that POP.

Try something like this as you deliver the news…

“Steve, I appreciate that you want to save money and pay the lowest possible price. However, our company made some important decisions long ago.

First, we decided that we would deliver the very best product/service available so that our customers get the best in return.

Second, we decided only to work with the highest-level clientele…those customers that understand and recognize value.

And finally, Steve, we decided that it made a lot more sense to explain a higher price ONCE, than to have to make excuses for poor quality and inadequate service over and over.

Honestly, Steve, do you think we made the right decisions?”

Happy Selling!

Sean

Sean McPheat
MTD Sales Training

(Image by Renjith Krishnan)

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Stop Trying To Overcome Objections

Objections: those reasons, stalls, excuses, or otherwise barriers that prevent you from closing the sale. Every professional sales person is familiar with objections, and has invested significant amounts of time learning how to deal with objections. You may not like sales objections, but let’s face it; if prospects did not object, you probably would not have a job.

A Different View
Today however, I want you to take a moment and THINK a little differently about objections. I want you to look at objections from a different perspective. In doing so, I believe it will help you better understand the buyer and your processes in handling and overcoming more objections successfully.

A Good Question
“Why do you try to overcome an objection?”

Before you answer that question too quickly, let me add this bit of news. Who is it that has the objection? Is it YOU? No. Ok. It is the prospect who actually has an objection, not you. How then, does anything really change if YOU overcome the objection?

You see, since it is the prospect that has the objection, the problem, the mental block that is stalling the sales process, then it is really the prospect who has to overcome the objection—NOT you.

A Different Way of Thinking
If the prospect objects on price, then it is the prospect that has to overcome that feeling and belief. Whatever the objection, it is the prospect that has to get past it. I say this because the only thing you can truly do is HELP the prospect get over the objection.

Instead of viewing the objection you get as an obstacle, as an obstruction, as a call-to-war, look at it as a time that you really need to HELP the prospect get through a difficult point of understanding.

The Same Side
As a professional sales person dealing with today’s modern and educated buyer, remember that you are on the same side. You want the same thing. The sales process is not a fight or a battle where someone wins and someone looses.

When the prospect raises an objection, you can battle with rebuttals and try to overcome the objection, or you can HELP the prospect solve his or her problem by working together.

Happy Selling!

Sean

Sean McPheat
MTD Sales Training

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3 Ways To Handle The Prospect Who Is Shocked By Your Price

You felt that it was a good presentation and that the entire sales interaction was on track. Then you present the price, and suddenly the prospect acts as if they just had a heart attack! What happened? A better question is, what do you do? Below are three important steps you should take when this situation occurs.

The Three DOs

#1. Do Start Over
The fact is that if the prospect is truly surprised by your pricing after you have had a complete sales interaction, then you really missed some fundamental and essential points in your presentation. When this happens, you have failed in one or all of the following areas:

Understand that at this point, there is no such thing as answering objections. There are no valid objections to overcome because there is no valid offer. There is no legitimate offer because you never carried out a convincing presentation. All you can do now is try to go back and cover the things you missed. Just be honest…

“Whoa! Ms Prospect. If this offer seems out of line to you then I must have really missed something. Can I ask you a few questions?”

Then go over the problem-exposing questions, and value building points.

“Ms Prospect, was I able to show you that right now your drivers are spending at least 35% more in loading time?”

“Can you see how you are currently losing £722 ever day in the factory?”

Do not try to fix the problem. Go back and erase it.

#2. Ignore It
It is possible that the prospect is faking this apparent shock. A skilled business person will use such a tactic as a negotiating tool. If you are absolutely positive that the prospect is being less than honest with you, then continue on and close with confidence. Maintain the look and disposition that you are an experienced professional and aware of such tactics.

If however, you are not certain if the prospect is acting or not, then follow tip #1 first, followed by #2.

#3. Do Ask for Referrals and Leave
You may not have the time or permission to start over and ask questions, and ignoring the situation also may not work. Either you messed this up badly or the prospect just doesn’t get it. In either case, it is too late. There comes a time to learn from your mistakes and accept them.

A “shock” situation at the very end of the interaction is likely a failure of the entire sales process or indeed the way that you qualified this prospect in the first place. Instead of trying to put out the fire, it may be best to get out of the building!

Posting Oct 19, 2011: The Three DON’Ts
3 Ways NOT to Handle The Prospect Who Is Shocked By Your Price

Happy Selling

Sean

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

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Avoiding The Price Issue With Customers

On our sales courses, we often get salespeople questioning how they can draw their customers’ concentration away from pure price.

These are tough times, but it is still possible to put the emphasis on things other than price. Try these:

Put your Products and Services in the Limelight: Before you present any solutions, get the customer to agree on all the specific negative financial impacts of the problem they are facing. Ask how the problem that your solution solves has an impact on their profits and income. Ensure you do this while you are questioning effectively, and make sure they agree with the analysis you have worked out.

Make Yourself Unique: You must have something unique (or at least different from your biggest competitor) that makes the customer think your solution is the answer to their problems. And you must be specific enough to make the customer ‘see’ your solution is the answer. If you don’t, you run the risk of the price still being the most important differentiator to the customer.

Be Specific With The Benefits: The benefits must be worth more to the customer than the price. The best way to do this is to get the customer to quantify the specific financial impact of your differentiators on the finances of the problem. You might quantify how much the customer will save with you rather than your competitor’s product, or the value of the time they will save if they use your services rather than anyone else’s.

Following these ideas makes the customer think of the financial impact of NOT going with you, rather than the price of doing so. If you can get the customer thinking this way, not only will the price not be top of their agenda, but the value of what you have will be that much greater to them.

Happy Selling!

Sean

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

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