(If you haven’t seen the first two rules in this series, check out:
If you have a price objection, and you’ve validated it as a legitimate price objection, it’s time to handle it.
Legitimate price objections come in 2 flavors.
1. Objections about value
The customer does not think you’re worth it. If they did, they would buy. (Or so they say.) This is a great chance for you to talk about your value (although you have been doing this all along, right?). Explain why seemingly small things have a big impact on their success (“guaranteed support resolution in 24 hours means your sales team is not stuck for weeks with a million dollar deal on the line”, “our personalized training costs more upfront, but quickly saves time through increased productivity and fewer support requests”). You should already know what your prospect finds valuable. Hopefully, by the time you get to a proposal, you have agreed on an approximate value framework. Remember that your assertions of value are irrelevant– the only thing that matter is the prospect’s perception of value, so make sure you are speaking their language.
For example, acknowledge that competitor X is much cheaper, and it’s in the same category as us, but that’s like saying a Kia and a Porsche are both cars. Here’s what we do that’s different that will end up having a huge impact on your bottom line. If they don’t value some of the differentiators, offer to remove them (if you can). This really helps clarify what the customer really cares about. If you can remove parts of your solution, and lower your cost, you can make money will saving the customer money. In many cases, the customer decides they really do want the value-added features they said they didn’t want to pay for.
2. The prospect doesn’t have the money
Sometimes, prospects see the value, but simply don’t have the money (“yes, I can tell that Lamborghini is a wonderful car, and I see why you price it at $300,000, but can I have one for $30,000?”).
Sometimes, this is an issue of budget schedules. Ask about how they would like to pay– perhaps a slightly different payment schedule works for them. (We’ve even been asked to accomodate requests to spend money “early” in a project, because the budget would otherwise go away.)
Second, see if you can unbundle some of the value from your offering to reduce the price. This might mean removing value-added components of your offering, or simply moving some things into future phases. Never simply discount. This undermines your credibility not just in sales negotiations, but as a company.
Sometimes, it’s just not meant to be.
And the most important case to consider: the prospect is not a good fit. The earlier you can find this out, the less time everyone will waste, but even at the end of the sales process, it’s better to walk away than destroy your brand and your profit trying to sell to someone who doesn’t really want to buy what you’re selling.