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?
“That costs too much!”
“As compared to exactly what, Steve?”
“Ah, um, I’m just saying it costs a lot, that’s all.”
“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…
“That costs way too much!”
“Are you talking about the cost or the price, Sarah?”
“Uh? What’s the difference?”
“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.
MTD Sales Training
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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
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
MTD Sales Training
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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.
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.
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.
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.
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
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!
MTD Sales Training
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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.
“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.
“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.
Sean McPheat MTD Sales Training
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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
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