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When a rep faces a price objection, he or she risks losing control of their sales process.
It’s important to understand is that several factors dictate a customer’s relationship to price. Very few of them are rational. Because pricing concerns are emotional, salespeople shouldn’t take them at face value.
Pushback on price is a common sales objection. In the majority of cases, when a rep hears one, there was another (hidden) reason that cooled the customer down. It’s also worth noting that the prospect is usually unaware why. It’s, therefore, up to the representative to figure out what led to the client’s reluctance to sign.
Why clients say “it’s too expensive.”
There are four main reasons why the price prevents the sale’s conclusion:
- The salesperson brought up the price too early in the sales process
- The prospect doesn’t see the value of the solution
- The prospect doesn’t know how much the solution should cost
- The prospect is negotiating
The salesperson brought up the price too early in the sales process
The specific moment when, during the sales process, the prospect brings up their price objection matters. If the objection happens early in the process, the salesperson needs to figure out why their prospects are even thinking about the price at that moment.
More often than not, when monetary objections happen early, it’s likely that pricing conversations happened too soon; when the customer didn’t have a strong enough incentive to justify the amount requested.
Ideally, reps should address the cost after the qualification stage. If the objection is raised before the prospect is thoroughly qualified, the salesperson needs to identify the weak point in his or her sales process that is compromising the sale.
How to address a price objection that arises early in the sales process
Representatives tend to challenge price objections by asking the prospect “Too expensive compared to what?” While the response is often recommended, it’s actually not very useful. Instead, salespeople need to understand where their objection is coming from.
“Can you tell me more” is an excellent question to ask at this point.
The customer doesn’t perceive the offer’s value
One of the objectives of a B2B sales process is to create a desire strong enough to counter any price objections.
However, even when the steps of the process are followed, and the price is addressed at the right moment, the representative may encounter a prospect who’s reluctant to spend. When that happens, the salesperson again needs to identify the flaws in his or her approach that preventing the customer from seeing the value of what he or she is offering.
How to deal with a price objecting when the prospect doesn’t perceive the solution’s value
When it comes to highlighting the value of their solutions, representatives tend to praise their merits to justify their price.
Instead, the cost of the solution should be put in perspective by quantifying the cost of the prospect’s problem:
- How much does the client already pay to manage the challenges or losses caused by the problem?
- How much would the proposed solution save them?
A good question to ask to start things off could be: “can I ask you what’s changed between today and our last conversation? We had discussed pricing last time and it didn’t seem like an issue.”
The customer doesn’t know what your solution should cost
Most of the time, the potential customer’s only point of reference is their past buying experience. So it could be that the prospect is comparing you to a low-cost competitor.
It may also happen that the price objection stems from their lack of information about the actual cost of the proposed solution. If the prospect doesn’t understand the value, he or she will revert to taking the monetary aspect into account first.
A price objection based on perceived value is, again, the result of deficiencies in the sales process.
Customers don’t systematically buy from the lowest bidder, so when pricing concerns happen, the representative must highlight the added value of the product and its ability to reduce or eliminate the problem experienced by the potential buyer.
The rep also needs to build the prospect’s desire for the solution so he/she sees it as the best alternative on the market.
The prospect is negotiating
A price objection can also be a negotiating tactic. In this case, the representative needs to ask the potential customer if they have a real problem with the price or if it’s an attempt to reduce it.
Once the representative knows the real motivations of his client, he is better able to inform him adequately and keep control of the situation.
Instead, they should try this two-step process:
- Lower the prospects resistance by replying something along the lines of “I understand,” “that’s a good question” or “that’s a good point.”
- Ask the necessary questions that will help the potential client to find the answer to his or her objection.
Although several responses can help manage price objections, when a rep faces them regularly, it’s usually a sign that critical steps of the sales process have been poorly executed or even forgotten.
For a sales process to be effective and easily eliminate price objection, it must include:
- a step to identify the buyer’s compelling reasons, and
- another to quantify the cost of the prospect’s problem.