Handling Price Objections and the Real Reasons We Get Them
Handling price objections means you can overcome one of the most common sales objections, close more sales, grow your business, and earn more money.
Customers object to price for 3 main reasons:
1. Comparing your product to others
2. Their expectations about the price
3. Beliefs about the cost
On this page you can gain sales training on the reasons the buyer is raising a price objection.
How to define the beliefs and evidence that supports their sales objection.
The techniques to use to overcome the cost objection.
3 Reasons why we get sales objections to price
The customer may simply say the price is too expensive.
That simple statement can have so many different meanings. Some of them real, some a smoke screen, some the buyer believes, and some they don’t.
When handling price objections effectively you have to get to the real reasons, the beliefs, and the past experiences that support them. So here are 3 common reasons behind price objections and how to handle them.
1. Price comparison to other products
The prospect compares your product to a cheaper one that they assume is similar.
If the other product has less features and benefits then handling price objections is done by showing the buyer that the evidence is false.
If the sale is for a service the cheap competition may have hidden cost that that are not given in the advertised cost. This happens a lot in B2B sales. Where there is a monthly or weekly service charge or the cost could be increased quickly once they have signed up.
The buyer may be unaware of the positives included in your price, such as, after sales service, longer guarantees, and the quality of your products.
Another reason buyers compare cheap products to yours can be misleading advertisements and marketing. Be aware of your competitor’s claims in their literature and adverts when handling price objections.
2. Expectations of price
Some buyers will have an expectation about what the price should be.
These are based on their beliefs and past experiences. A common sales objection reason is when they have bought a similar product, even yours, in the past.
Costs rise and they can’t accept that the item they bought 10 years ago has gone up in price.
When handling price objections watch for customers not appreciating all the costs of getting your product to market.
The pharmaceutical industry suffers from this reason for price objections. For every 10 medicines that make it to market there are hundreds that don’t.
The company has to pass on the R & D costs to the customer.
Manufacturing cost, transport, and manpower are all expenses included in the price to the customer. When handling price objections you may have to get your customer to appreciate the cost and not take your simple product or service at face value.
False information from other people is another reason for an objection based on price expectations. A good meaning friend, a neighbour, and your competitors, may be feeding your client with false evidence on which they are basing their beliefs.
3. Belief they can get a cheaper price
Some buyer’s, in both B2B and in direct sales, believe all sales people can give them a lower price.
Some even distrust sales people and think they are looking for a quick sale at a high price so they make more commission.
In many cultures you have to handle price objections because it is standard practice to haggle. Customers want to know they have got the best price possible and use costs objections as a way of doing this.
Then there are the reasons based on budgets and available money. Businesses have planned budgets and people have an idea of what they can afford.
All these reasons for objections can stop your sale and you need to be able to identify them and overcome the real objection.
Overcoming objections to price
The process for handling objections to price.
Clearly define the sales objection to the price
Gain agreement that this is the only objection
Present a great answer that targets the beliefs and false evidence supporting the objection
Close the sale
Define the sales objection
Before you can overcome an objection to the cost of a product you have to know what it is.
Question the buyer and discover what makes them believe the price is too expensive. Find out which beliefs and past experiences are supporting the objection on cost.
Handling price objections is a lot easier when you have asked enough questions to clearly define the objections.
The sales objection may be based on totally false evidence and appear unrealistic to you. But to the buyer, on their map of reality, the objection could feel very real. You can get more sales objection training on defining the objection at Defining sales objections using NLP techniques.
Once you have found the beliefs and evidence that the objection to price is based on you can take them away and the objection loses all support and crumbles.
Is this the only sales objection
The next stage is to gain the agreement from the prospect that this is the only objection, the only obstacle to closing the sale.
when handling price objections, if you don’t gain agreement to this being the only sales objection you could give your best answer and then be hit by another one.
Many sales people that I coach on handling price objections are too eager to give an answer and miss out this important part of the objection handling process. You want to know that if you answer this objection to price you will gain the sale.
Present a great answer to the real objection
You’ve defined the real objection, gained agreement that this is the only objection, and now it’s time to present your answer.
Handling objections to price means answering the real objection from the buyer’s perspective. To do this effectively you have to show them why their beliefs and information that supports the objection is wrong. You take away the objections support and the objection falls.
Then you must present the positive benefits about your price. It’s not enough to show the negatives about the price objections. You have taken away their objection now replace it with positive benefits that you can offer to the customer.
Examples of presenting positive sales benefits
Here are some of the positives that you might want to include in your sales presentation after you have taken the objection’s supporting evidence away.
Present additional features and benefits that you can offer the buyer.
Supply information that proves the quality of your product, your service, and your brand.
Present evidence of your after sales care and service.
All the additional benefits you present should be relevant to the objection raised by the buyer. These will increase the value of your product and show that the it is not directly comparable to the cheaper products on the market.
Give details of manufacturing costs.
Cost of providing a service such as manpower or fuel.
Compare the value of your product to the source of the customer’s beliefs on price. Target the source of the belief that they can get a cheaper price.
Use literature and evidence showing company price list and confirm they are getting the best or standard price. The literature is to show you are definite about the price and no one else has been given a better price than them.
Build the value of your proposal and show how the product saves money so the cost is an investment
By gaining agreement to the objection you can also close the sale.
Earlier in the objection handling process you gained agreement from the prospect that this was the only objection. This is the only obstacle between you and closing the sale.
Now, if they agree that the objection to price has been answered, you can gain agreement to the sale because nothing else stands in the way.
Sales workbook training course on objection handling
A professional training course on how to handle all sales objections including objections to price.
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