The Best Way to Handle a Price Objection
The absolute best way to handle a price objection is to structure your sale so you don’t get one. Price objections arise because buyers are unaware of the price range they are looking at for their purchase, or don’t see enough value in your offer to pay your price. Take a value-based approach to your selling and you can short circuit both of these.
In business to business selling there are many ways to handle the price conversation. The worst is to address it late in the game, with trepidation. This generally causes sticker shock in the buyer’s mind – an irreversible condition. Once afflicted they – and you – can never get past it. Your deal digresses into a haggling session you’d rather not have.
The best way is to address price early in the sale, in a comfortable and candid way. Dip your toe in the water and check the temperature. If things look good, carry on with the sales conversation. Address price thoroughly after your buyer’s Pain-Gain-Value needs have been diagnosed [for more on value-based selling click here. When a price or fee is put beside a buyer’s expressed needs it makes much more sense to them. They can most clearly see what they are getting for what they are paying.
Here are some sales approach specifics you might find helpful…
Your first sales conversation with a buyer should consist of a hearty diagnosis of their Pain points, a clear statement of what they are trying to achieve by fixing them [Gains], and a list of the Value they are looking to get by doing so. Once all of this is on the table it’s a good idea to say something like “Thanks for sharing that with me. If I’ve heard you right where you are at is [repeat what they told you].”
Wade into the price conversation with “Given what you want to fix, what you want to accomplish and the value you are looking to get, the price range you are looking at is approximately $XX/between $XX and $YY. How does that sound to you conceptually at this point? I’m not looking to nail anything down just yet. I just want to see if we’re on the same page regarding the spend.” This approach will get you into the price conversation early on, and help you determine if your buyer is operating in reality or if they want a Cadillac at Ford Fiesta prices.
If you and the buyer are miles off on price range, you’ll need to have the “I think what you want to accomplish and what you want to spend aren’t in line right now” conversation. This will end with your buyer adjusting their purchase objectives, you adjusting the scope of your solution or you referring them to a lower cost provider.
If you are both aligned on the price range carry on with your sales conversation. Learn the specifics of their needs to the point you can build your solution. When it’s been built and the time comes to present your final price/fees do it this way… “The major Pain points you outlined to me were [insert Pain point here]. What you are trying to achieve by fixing them is [insert Gain here]. Underneath it all, the Value you want to get by doing so is [insert Value here]. Am I correct with my summary?”
This question will help confirm if your assessment of their situation is accurate, and sets up your presentation of the price.
If your assessment is in fact correct, carry on to say “Given all of that, the feature[s] of our solution that will deliver on that are [outline your solution features here].” Then ask “does that make sense to you so far?” If it doesn’t, take the time to review things with them until you get aligned. Once you get aligned then say, “here is the price for this solution [state price here].”
This approach takes your buyer through a very distinct journey prior to getting to the price destination. They get refreshed on where their Pains lie, what good looks like when the Pain goes away and the Value they’ll get by proceeding with their purchase. They are totally clear on what they are getting for what they are paying as they consider the final price.
This sales approach significantly lowers price objections. First, you have weeded out buyers up front whose budget is below what you’ll charge. Second, for those that make it through the sales process you’ve clearly connected value to price paid.
Of course, there will still be buyers who will balk at whatever you charge. If haggling is an accepted part of your sale then have your strategies ready to deal with that. Otherwise, stick to the value-based road. It’s a much smoother ride.