When I get asked by sales professionals all around the county how they can overcome the “Your Price is Too High” objection, my response is you must first understand that in their operating reality, your prospect is right. Your price is too high. For now.
Your price is too high because you have not done one or both of the following:
- You have not uncovered a good and compelling reason for them to buy from you. Put simply, they have not recognized a need.
- You have a value problem. You have not established what your product or service will provide to them financially, operationally or personally and what problem you are solving for them.
You have choices when you hear that objection.
You can ask “Where do I need to be with my price in order to close this deal?” which many salespeople resort to. Selling on price, however, is always a losing proposition. You might win a deal, but you are left defenseless because someone can always come along with a cheaper price and take your client away. The other option is that you can take the time to uncover needs and sell value.
The most effective strategy against the price objection is preventing it in the first place.
What’s the Problem?
Let’s assume we have a great handle on all the features and benefits of our product/service. We also have a target set of clients that have been predetermined to likely need what we are selling. We might have even been trained on why they need what we sell. This combination can often be deadly — especially to the seasoned sales rep. We think we know the problem our client has (because we’ve seen it before) and so we charge in to solve it! Even if we are right, we set ourselves up for failure. Why? Because we didn’t take the time to ask about their situation, really listen to them and create something that will be meaningful to them personally. You must show that you care and that you want more than anything else to understand their operating reality and see if you can possibly make it better. If you do this, they will acknowledge a need for what you are selling. The only way to accomplish this is to use effective questioning skills and active listening skills.
True sales professionals concentrate on first understanding the client’s current challenges and identifying how your product or service will solve their problem. Think of it like this, no one buys the product or service you sell, they buy what it will do for them.
WIIFM. What’s In It For Me. That is what they buy. Picture your prospect thinking to themselves with every sentence you utter about your product or service. “So What? So What does that mean to ME? What’s In It for ME?” If you can take the problem you uncovered and communicate the value you can deliver in those terms, you are well on your way.
Value = Benefits – Cost
Value has a price tag. And it varies depending on the buyer – not the product/service. Long before the price is ever mentioned, the sales professional must uncover what their prospect perceives as valuable and what the consequences of not buying are worth. With that in mind, they can position it so that the buyer feels as though the price was a great deal for them, regardless of the price. ROI! The equation Value = Benefits – Cost shows that we put a price on cost AND we put a price on the benefits. If in our mind, the benefits are greater, than there is value in making a purchase.
Let’s use buying a highly commoditized item as an example. A cotton, short-sleeved, T-shirt. These types of T-shirts can range in price from $5 to $100 or more. Things matter to buyers; color, sheen, logos, convenience of purchase, weight, etc. And, they often also appeal to emotions such as a souvenir of a great vacation, your favorite band, college, a show of super-fan for a favorite sports team. Personally, I wouldn’t pay much for a Mets T-shirt, but would spend plenty more on a Cubs T-shirt and even more still if I bought it at a game, where I had a great time watching them beat the Mets. But, that’s just me.
You can be prepared in advance to uncover the problem, position what you are selling in terms of what it means to them and in terms of their perception of value, AND help them justify their purchase when they state your price is too high. Or you can lower your price. It’s your choice.