“We don’t have the budget for that.”
“That’s too much.”
Not exactly the kind of responses you hope for.
Why don’t they see the value? Why is that too much? It’s going to save them a lot of money in the long term. Or more than pay for itself in returns. So what’s the hold up?
Looking at the bright side, price objections do signal that there is likely some interest in the product itself. But it points to some shortcomings with your script and value proposition.
A true salesperson knows to take responsibility for the close and to find a solution. (And then go back to their script and identify what caused the objection in the first place).
Like all sales objections, handling price objections is something that you should plan for before you even start your pitch.
You should have a clear understanding of…
- The value your solution offers to your customers – You need to make sure you are well in-tune with the true value of your offering to your customers. The best way to learn this is to talk to current and past customers and listen to their price expectations before they purchased.
- The cost of alternatives – 81% of consumers and 94 percent of B2B buyers do some form of online research before making a purchase, so you should know the price of your competitors and how you are positioned in the marketplace.
- The cost of not taking action – your solution most likely saves time (which you can assign a $ value to), saves money, or helps your customers make more money. This means that you can tell your customers the cost of not pursuing your offer.
Now that you understand the true market value of your solution, here are some techniques that will help you effectively communicate your pricing in your pitch to avoid and overcome price objections.
1. Find Where It Hurts
Humans are creatures of habit, and in order for us to use up our glycogen stores to make a decision we need to first feel the pain of our current actions. Start by delving into the problem that your offer solves and have your customer feel the pain of their current situation so they will feel motivated to take action.
2. Build Value In Your Offer And Don’t Discount
During your pitch you’ll want to hit multiple customer pain points and effectively communicate how your product will solve those problems and save your prospect time and money. When you deliver a pitch that expresses the full value of your offering, you differentiate your solution and you’ll be able to avoid commoditization, which is the enemy of high prices.
3. Use Price Minimization
After you’ve expressed what differentiates your solutions, you can logically layout alternatives that make your price look small in comparison. For example, comparing the price of an educational course you may be selling to the higher cost of working with a professional consultant.
4. Use Price Justification
Similar to price minimization, you can use reasons to suggest why something might be priced the way it is. This helps the customer appreciate the business cost of providing your solution. For example you can use phrases like “It’s a little more expensive however” and then offer credible justification for why that might be. Maybe it lasts twice as long. Or it saves the customer a lot of hassle. Price justification moves the focus away from hard costs, and toward perceived value/benefit.
5. Use Multiple Level Offers To Create Value Comparisons
For example, you could have an entry level offer, “best value” level offer and enterprise or business level offer. This way you don’t have to discount, yet you can have solutions that get different buyer-types in the door.
6. Illustrate The Cost Of Not Buying
After you’ve presented the price, follow up with an explanation of the cost of not buying so that the customer understands that whether they buy from you or not, they’ll be making a financial decision today – “Let’s look at the cost of not taking action today”.
7. Use Risk-Removal
After tackling the value element, a key second step is risk-removal. A guarantee, warranty, or whatever else you use to remove risk gives prospects more confidence in their investment and turns their attention from the money they’re spending to the result you’re promising. It’s a great way to pull them over the finish line.
8. Add the Element of Urgency
As you get closer to overcoming price objections and closing out a sale, urgency can become a great motivator. Instead of discounting, think about add-ons or bonuses you can use to reward fast action, or inherent scarcity that exists within your offer (limited supply, buyers before X date Y included, etc.). Give prospects a good, genuine reason to think, “I don’t want to miss out on that.”
Whether you’re selling B2C or B2B you should expect that your customers are going to have some prior information on pricing. Your best bet is to correctly prepare for this with a script that’s value, not price-based. Of course, having a plan to handle price objections, and to reframe the conversation away from hard costs and toward perceived benefits will make these objections easier to avoid, and easier to overcome.
What’s YOUR best tip to overcome price objections?