Timing objections are tough to deal with, but you know what’s really the worst? Pricing objections! For sales reps, pricing objections are like splitting the check between 8 people at a restaurant – a simple payment suddenly causes grown adults to tear out their hair in frustration.
Unlike other objections that come up during the sales process, talking price can be a huge obstacle for sales reps – no matter how experienced. You have to be able to get past the discomfort of talking money with prospects and find ways to show that your product is valuable and worth the cost. It may not be the most fun part of your job, but you need to have strategies in mind to overcome pricing objections or you’ll never close the deal.
Seriously though, what’s the deal with pricing objections?
When Did the Objection Come Up?
The way you handle a pricing objection depends a lot on when in the selling process you first hear the objection. Much like an early timing objection, a pricing objection very early in the sales process may not be a legitimate issue. For example, a prospect might talk to you for a few minutes on a prospecting call and say, “This all sounds great, but we don’t have the budget for anything big right now.” In this case, it’s probably just an excuse to get off the phone and stop the selling process cold. But don’t let the prospect hang up and get the best of you. Instead maintain their interest and say, “Let’s talk pricing later. But first, let me tell you more about the value we provide to your business.”
If the objection comes up on a later phone call – maybe after one or two calls and a demo of your product – you should take it more seriously. A pricing objection at this point in the sales process could kill a deal that you’ve worked hard on. The prospect may say that their boss won’t approve the budget for this purchase, or that the price is just too high for them to justify the expense. This is where you really need to dig in and discover why price is suddenly an issue for the prospect, and whether you can get past the problem or will lose the deal.
What’s the Reason for the Objection?
Understanding a pricing objection is the first step to overcoming it. When you hear a prospect say, “This product is too expensive,” don’t give up! It’s not the end of the discussion, but simply the beginning. Keep asking more questions so you can understand the real reasons behind the objection. For example, you could ask:
- What is your total budget for this project? Is there any flexibility in that budget?
- Who is the person that will approve this purchase? Do we need to have a call with your CFO to get them on board?
- Is this really a budget concern, or do you feel like our product doesn’t offer you enough value for the money?
- Have you looked at the cost of our competitors in the market? Would you like to see a competitive comparison to see how our prices compare?
- Would it help if we created a payment plan to spread out the cost across multiple quarters?
- What product capabilities would make you feel like you are getting the best deal for your money?
Overcome the Objection
Once you understand the reason behind the objection, it’s really all about proving the value of your product to the prospect. If they believe that they’re getting a great product or service for the money, it’s easy to close the deal. When you come up against a pricing objection, explain to the prospect how much money your product will save their business in time, effort or employee hours every day. You should say, “How much money will your company lose by NOT buying our product in the next year?”
Happily, pricing objections can sometimes just be the first step in the negotiation process when a prospect is almost ready to buy. They may say your price is too high simply because they’re trying to lowball you or get a discount on your product. However, you don’t want to lower the price because you’re desperate to close the deal. They’re ready to buy, so don’t give anything away for free. Instead of discounting the price, offer free onboarding services or another benefit that doesn’t cut into your bottom line. If the budget is truly too tight, be willing to negotiate, but don’t give away too much. By showing the prospect the true value of your product, they will be more willing to pay what you’re asking.
Pricing objections don’t have to be scary. Just smile and stand up for your product’s value at every turn. If you can understand the reason behind a pricing objection, prove the value, and offer them non-monetary benefits, you’ll find it easy to get past every pricing issue and close the deal.