Sales Proposal Rule: Validate Price Objections

Sep 13

In last week’s post, we looked at how and why some small business owners start negotiating against themselves, serving up their own price objections.

Now let’s talk about how to deal with price objections. This is a simple 2 step process:

  1. Validate the price objection
  2. Handle the price objection

This post will focus on validating the objection. We want to know if it’s really a price objection. Does “that seems more expensive than we expected” mean that price is a problem, or is it just a seemingly polite way to say:

  • We can’t figure out what we really want, so everything seems expensive.
  • That’s 15% more than the amount I have left in my budget for this quarter.
  • I’m nervous about getting this decision wrong, so I’m trying to postpone or kill it.
  • We’re about to reorg, so I’m just trying to make this go away until the dust clears.
  • I’m trying to save some budget to take my team to a conference in Hawaii.

The first thing to remember is not to get flustered. The second thing is not to push back (at least, not yet). Try to get enough information to understand what’s really going on. So you might respond with “oh, OK, tell me what you were expecting?” They might then suggest that they had an internal solution that was cheaper, or that they talked to a competitor, or they might just say they didn’t know how much this would cost.

When you have an idea of what the price objection story is, see if it survives this test: Offer to make it go away. Say “let’s suppose we could get you the price you want, are you ready to move forward today?” If they say “yes”, you have a price objection that you can deal with (and we’ll go into more details in the next post). If they start hemming and hawing and saying they need legal review and they need to make sure that the other stakeholder’s objections about timing are met, and they have questions about your delivery methodology, then you don’t have a price objection, you have fundamental sales objections masquerading as price objections. This is a challenge, but not the end of the world. You’re just not as far along in the sales process as you thought. (You may also want to check out this post: Your Pricing is Hurting Your Proposal, but Not How You Think.)

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