Price objections are like smoke detectors going off. As with a fire, the objection itself isn’t the real problem—it’s an alarm signaling there’s something that needs your attention.
Maybe your customer doesn’t see the value. Maybe they’re comparing your product or service to a cheaper alternative. Or maybe they simply weren’t expecting that number.
Objections can trip up even the most seasoned salespeople and cause them to sacrifice margin or—worse yet— lose the sale altogether.
That’s why it’s crucial for your salespeople to be able to handle price objections effectively and sell with value every time.
How to Handle Objections to Price
Give your salespeople this five-step formula for overcoming price objections and they’ll be able to maintain healthy margins and build value in your customers’ eyes.
Step 1. Expect Price Objections
Price objections are a fact of life in sales, so your sellers must anticipate that customers will most likely resist the initial quote. Your salespeople can hold their ground and avoid a price war by being prepared for pushback.
A customer will only say “the price is too high” if they believe they can get the product or service at a lower rate from a competitor or if they think your salesperson will fold under pressure.
To combat both of those vulnerabilities, your salesperson will need to feel confident and focus on building value.
Step 2. Know Your Competition
A competitive marketplace requires your salespeople to be experts in both your company offerings and your competitors’. Make sure your sellers understand your toughest competitors—their products and services, strengths and weaknesses, value proposition, and pricing if possible.
Maybe your biggest competitor offers a lower price but consistently falls short on delivery. Knowing those holes allows your salespeople to defend your price and demonstrate the value of partnering with your company.
Step 3. Clarify Margin
Successful salespeople understand the importance of margin and don’t discount to win business.
It may feel harmless or even advantageous to discount a product or service to make the sale. But it’s important to remind your salespeople that offering a discount—even a small one—could have a devastating impact on profits.
Why? Because when a salesperson caves to a cost objection and discounts their product or service, it sends a message to the customer that they’re not 100% behind what they’re selling—immediately diminishing value and credibility.
Step 4. Own Your Differentiator
The last thing you want your customer to do is commoditize your product or service. If they believe they can get the same product or service your salesperson is offering for less, then what’s stopping them?
To avoid commoditization, your sellers must be able to communicate what makes your product or service different. A powerful differentiator will set your offering so far apart from the competition’s that the customer won’t be able to compare them side by side.
Train your salespeople to be the differentiator by using a consultative selling strategy and positioning themselves as trusted advisors during the sales process.
Step 5. Be Willing to Walk
One of the hardest lessons to learn in sales is that not all business is good business.
Your salespeople must be willing to walk—even when prospects are sparse. In the end, buyers who continually price cut and commoditize your offerings aren’t the type of customer you want to partner with.
There’s nothing more powerful for building value than having the confidence to walk away from a deal that isn’t the right fit. By embracing that attitude, your salespeople will learn to stand their ground and create value that customers won’t want to miss out on.
Overcoming Price Objections in Sales
Your salespeople will most likely face price objections (and there will always be a competitor willing to cut their prices lower than yours). The key is having a plan in place to overcome price objections in a way that adds value and strengthens the relationship.
That’s why sales training on overcoming objections should be an essential part of your team’s development. Make sure your team has a plan ready and perfected for the next time they hear, “Your price is too high.”
Find out how The Brooks Group’s Sales Negotiations training program can give your salespeople the strategies and tactics for handling price objections and closing more business.
