Written by Sean McPheat |
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.
Prospect: “That’s high! It’s too much.”
Salesperson: “Are you referring to the PRICE or the COST?”
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.”
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!
Originally published: 20 May, 2008