Overcoming Price Objections in Sales
Learn how to respond to any price objection. Target ideal buyers, communicate value, and push through the most common obstacle salespeople encounter.
December 6, 2016
“It costs how much?!” “Your price is way too high.” “I can’t afford that.”
Sticker shock is the number one obstacle salespeople face, but not all price objections are equal. Buyers may balk at the final price several reasons, like a bad experience with a competitor, misunderstanding product features, market misalignment, or cash flow problems.
No matter the reason, when a buyer says, “It’s too expensive,” what they really mean is “You don’t provide enough value.”
And that’s a big problem.
Scripts and canned responses might be useful tools for handling routine price objections—and some objections are just buyers kicking the tires.
But if you want to consistently make the sale when price becomes an issue, you need to identify the specific cause behind your buyer’s objection and show them exactly why your product or service is worth every penny.
So how do you demonstrate value? The first step is knowing what you’re worth.
What Are You Really Worth? (Seriously)
“Know Your Value” isn’t just a motivational slogan to make sales reps feel better—it’s a command that begs a simple question: What is your product actually worth?
What does your product do? How does it make work easier, faster, or smarter? Why are you better than the competition? What makes your product essential to a buyer’s success?
These are fundamental value-based questions, yet too often sales reps forget the core value of the product or service. Features are not value. Discounts are not value. Solutions are value, and the answers to how your product solves problems—how it provides value—should be burnt into the mind of every sales rep in the company. They’re going to encounter price objections based on the perceived value of the product every single day.
Successfully answering these objections has everything to do with reframing the conversation to be about value, not price. And the best way to improve your conversion rate when dealing with price objections is to target the right buyers from the beginning.
What is Your Ideal Customer?
You can’t provide value if you don’t know who you’re selling to. A brand new Corvette is undeniably a premium car, but its value is significantly lower to a buyer that just needs a car for the morning commute. To establish value from the outset, you may need to take a couple steps back and consider your market alignment and ideal customer profile (ICP).
A useful ICP is more than compiling a demographic breakdown of potential customers based on industry, location, and company size. It’s about finding the people that will pay the right price for your offering. Lincoln Murphy from Sixteen Ventures says, “There are basically only two things you need to know to create a value pricing strategy—your customer’s willingness to pay, and their ability to pay.”
The first concern tackles value perception, the second pricing concerns and market alignment. The two are not the same thing.
Responding to Price Objections
Knowing your value is important, and positioning yourself in the correct market with your ideal buyer is key—but how do you actually respond when a customer makes a price objection? Sales trainer Tom Reilly suggests slowing down and clarifying the objection with simple questions that prompt a detailed response.
“Dig for the motive behind the price,” Reilly urges. “‘How did you arrive at that budget?’ ‘What did you anticipate the price to be?’ ‘Why has price become an issue for you?’ Uncovering the motive behind the price objection will suggest the way to deal with it.”
Even though each question addresses price, the focus is on value perception, specifically diagnosing what the buyer perceives the product to be worth. Once buyer expectations have been addressed and recalibrated, it’s a simple transition to reframe the conversation about value instead of the price tag.
Know Thy Value
Value is in the eye of the beholder. Top performing sales reps know exactly what their product is worth to the people that need it the most. They handle price objections easily because they understand that buyers don’t object to valuable solutions—they object when they can’t see the value.
Know your value, wear it proudly on your sleeve, and handle price objections with confidence and ease.
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