“Is this really your best offer?” “Don’t you have any end-of-quarter promotions?” “[Competitor] is offering the same thing for 30% less. Will you match?” Does handling price objections put a wrench in your process?
Any sort of price discussion will send the hairs on the back of a sales rep’s neck up as previously lost deals run through their heads. Losing on pricing is brutal to the company and the sales representative – especially when it happens late in the cycle. So what can you do when it looks like you might be losing a deal on price?
The sad truth is – if you’re at the end of the deal cycle and you’re worried you’ll lose on price, you’ve probably already lost. The only way to overcome price objections is with value.
Price is a double-edged sword. It can be something that helps or kills a deal.
Value is never a bad thing. It only helps deals move forward.
If value is constructed properly and consistently refined from the first call to the contract signature, then price becomes a discussion point, not an objection. This is not an article about negotiating price. This is not an article about when and how to discount. This is not an article about how to handle the objection, “We don’t have the budget” early in the sales cycle. This is an article about how to build up and emphasize value throughout the sales process, so when you’re engaging with a buyer who suddenly (or consistently) wants to talk price, you can keep the process moving.Have the confidence in yourself to trust the value of your product. 💪 That confidence will help you ask the right questions, overcome price objections, and close more. #salestips #salesstrategy Click To Tweet
Establish and refine value EARLY
Value is defined by the buyer – not by the salesperson
Avoiding or managing a price objection starts at the beginning. Specifically, it starts with a thorough discovery process where you make it a point to fully understand what motivates and drives your buyer.
It’s too easy to ask, “Are you experiencing this problem?” and list the top three-to-five issues your product solves. The presence of a match does not mean your product is a real value add – it just means you know where to dive deeper. You need to know what the buyer thinks is the source of the problem, how they want it to be solved, and what the desired “end state” is.
Top sales reps will partner with their buyers to define what success looks like, but it’s a delicate balance of education and influence. The buyer decides what is of value to them, and what isn’t. All we can do as sales professionals is hope to influence – but we must accept we do not control.
Differentiate or Die
Andy Grove famously said, “Adapt or die.” When you’re building value, you must differentiate, or your deal will die. The more you can separate what you offer from the status quo, your competition, or an alternate solution, the easier it is to control perceived value. Simple supply and demand – the more scarce the solution, the higher the value (and typically the price!)
Use case studies, industry reports, testimonials – the more you can do to build up your product as unique, the easier it will be to avoid a bidding war with another product and justify your price point.
Don’t oversimplify your buyer’s needs
“What I hear you say is…” can be a dagger to the heart of your buyer. Either because you nailed their pain – or because you missed it entirely. It’s easy to hear a client mention “cost control” and turn that into “you’re looking to save money – we can help!” Be wary. If you make broad assumptions you risk alienating instead of building rapport. Focus on mirroring statements – repeat their own words back to them.
Every situation is nuanced, and each buyer is unique. While we all crave connection and validation of our problems, every buyer also wants a personal touch. Resist the temptation to lump their needs into buckets, and it’ll pay dividends.
Know your own value
Buyers have to ask for discounts – you don’t have to say yes
Imagine you’re buying a car. Do you accept the sticker price immediately, or do you ask if there’s anything they can do to lower the price just a bit? Even if the dealership or person you’re buying from started off saying that number was their “best offer,” you still probably ask for some sort of deal. It’s expected – nay required. Now imagine you buy a product, and your boss asks if you negotiated the price. If you say “no,” you’re in trouble.
Buyers MUST ask for discounts, free upgrades, or something to feel like they’re getting the best deal they can. However, just because they’re asking doesn’t mean you have to say “yes.” In fact, in many situations, the best thing you can do to build value is to refuse to discount. There’s very little stronger than saying, “I get why you’d ask for that, but our prices are firm. We set them so that everyone gets the best deal possible while maintaining the quality service we know you expect.”
Value is long term; price is short term
When a buyer comes at you with pricing adjustments, it’s important to understand what they’re looking for. Do they have a hard ceiling on their budget they need you to get under? Are they checking a box for their boss? Are they already sold but looking to feel like they ‘won’ the negotiation? Price is what they see right now – it shows up on the balance sheet nearly immediately. Value takes longer to show up and defines whether a product becomes essential or not.
Go back to the initial success criteria. Remind the buyer how you will get them to that desired end state. Then figure out what’s driving the request. Once you have that, you can refocus on the long term value.
Price is ONE detail of a deal
It’s a big detail, but a detail nonetheless. Work with your boss and get creative with the deal structure and price point. Can you get a testimonial out of a slight discount? Can you throw in a new (untested) feature to make them feel special? Can you change your net-30 to a net-90 so the client can pay in a different month? Again – discovery is key. If you mapped out what matters properly, you’ll be able to know what variables of price can be played with to get the deal done.
Be prepared if you’ve previously given discounts
Most Buyers will sniff out if you’ve given discounts before to other clients, or if you’ve offered an end-of-period discount, or if you have had sales. Understanding this, Buyers will rightly use your past discounting against you because clearly you do have some wiggle room on price. If you’re firm has engaged in these past behaviors then you need to be prepared to either defend your price and risk losing the deal or alternatively you need to meet the previous prices you offered. Why? Because when you previously discounted, you yourself established the real value of your own offering.
It’s not unreasonable for a Buyer to want to buy at the lowest price regardless of how indignant you get or how you attempt to justify those past discounted offerings. The Buyer did not force you to previously drop your price. Finally, Buyers are savvy when it comes to these relatively subjective deadlines such as end-of-year special pricing. As a Seller, you may firmly believe that you cannot offer that same price two weeks into the new year however the Buyer is feeling disrespected and will intentionally choose to go elsewhere rather than feeling unheard, disrespected, unappreciated, or simply a transaction.
One final thought – confidence is key.
Price will always come up as an objection or question at some point in the sales process. What is often overlooked is delivery of the planned rebuttal. Whenever pushing back on price, you have to be 100% confident in your product and it’s value to the buyer. Your buyer will take their queue from you. Without being dismissive, you have to hold firm to what you know your product’s value is. If you waver even a bit, it’s hard to claw that back.
Know what matters to the buyer – confirm it at every step in the process – and hold your ground.
Handling price objections boils down to VALUE
Just like in any negotiation, you have to know when to walk away. If you’re dealing with a buyer willing to not buy after you’ve made your best offer, the answer is NOT to drop your price. It’s to push the value they’re getting, and if they still aren’t interested, then be willing to walk away or ask for help. You do no one any favors by selling your product below cost.
Have the confidence in yourself to trust the value of your product. That confidence will help you ask the right questions, overcome price objections, and close more.
The best way to establish value is to avoid any discounting, and the best way to ensure a positive customer experience is to respect the Buyer’s purchasing perspectives.
“Price is what you pay. Value is what you get.” Warren Buffet.