All salespeople are familiar with the phrases: “we’ll get back with you soon,” or “let me think about it.” And high prices are often the reason for prospects’ hesitation. According to Hubspot.com, almost six in ten buyers want to discuss pricing on the first call, and at least 50 percent of your prospects are not a good fit for what you sell. There is not a set scenario pertaining to pricing objections—each prospect will have their own reasons for trying to negotiate on price. A skilled salesperson should delve into the situation to determine where the prospect is in the decision-making process.
The following strategies will help reveal the reason for any pricing objections and allow you to adjust your sales strategy to close the deal:
1. Demonstrate real value
Value pertains to the prospects’ critical needs, such as a database or platform for task management, and how your product or service can help. Emphasize the cost savings, performance, time, or resources gained by asking the following questions:
- How are you currently managing this process/activity?
- What would it take for our product to pay for itself, such as saved hours or additional clients?
- Are there any other costs that would be reduced by using our product/service?
- What are the impacts on your team and employees without this product or service?
- How much time would you save?
2. Consider competitive pricing
If the prospect states that you are too expensive, ask yourself if it could be a competitive pricing issue. Are your industry peers charging less for same-value products or services? It’s a good idea to research your competitors to see if it’s necessary to a re-evaluate of your own pricing strategy.
Prospects sometimes use the “it’s too expensive” excuse as a way to avoid telling you they’re really not in the market for a product like yours. Or, there may be mistrust of you or your company or a desire for a discount. Be specific—ask the prospect about their concerns with your product or service.
4. Learn if the price is a habitual response:
A prospect may push for a lower price if they believe that is what they are supposed to do. Plus, they want to feel that they’ve made the best effort at getting a good bargain. Consider if there is anything you can offer as a perk or discount that won’t cost much for your company.
5. Determine if the prospect has a real budget
Maybe the prospect is objecting because there isn’t a budget. Be direct. Ask them what their budget is and if there is some room for adjustment. There might be an alternative product or solution that best meets their needs.
A serious buyer will ask about price since they need to know how much budget to reserve. However, they could also be shopping for the best deal, or they realize their first quoted price can be negotiated. Don’t be too quick to discount your product or service—ask questions regarding their requirements, then determine what value you can provide. The quicker you can place value on your product or service, the faster you will close the sale.
If they insist on a deal that will devalue your product, then it’s better to walk away. Based on your conversation, if the prospect still seems serious, and you have no other choice but to negotiate, make completely sure you are speaking with the decision maker first. Also, ensure negotiation is not a regular occurrence with the prospect or future prospects. It can set unrealistic expectations for future deals and could hurt the perceived value of your product or service.
Vice President of Strategy and Marketing Services
A strategic marketing and branding expert, Ryan helps Elevation’s clients solve their problems and achieve their business goals through integrated marketing solutions distinguished by research, storytelling, engagement, and conversion. With a proven track record of energizing brands and having worked with a variety of Fortune 500 companies, Ryan is a respected expert in achieving consistent results through creative design, thought-provoking narratives, and innovative problem-solving.