Customer Experience News & Trends

When they say, ‘Your price is too high’

“How come we lost the sale?” some sales managers ask. “Our prices are too high,” some salespeople respond. It’s an argument that is being played and replayed in thousands of companies every day.  And it’s an excuse.

Successful salespeople recognize price objections for what they really are – a bargaining tool for prospects who wants to be sure of getting the best price.

Price as an excuse

Some salespeople use price as an excuse for a poor selling job. Price objections may raise a red flag indicating something else is wrong – that there’s a deeper problem. Here are 5 guidelines for analyzing the price problem.

  1. Is price more of a problem in the salesperson’s mind than in the prospect’s? Top salespeople know that selling is about offering the best value, not the lowest price. They uncover the prospect’s needs, analyze the costs associated with those needs and translate features of the product into what it will do for the prospect. The prospect’s buying decision will be based on perceived value in relation to price. Values or benefits are not in the product but in the prospect’s mind.
  2. Is there insufficient differentiation? The “we can get it cheaper elsewhere” comment generally indicates that salespeople have failed to separate themselves from the competition in ways that impact their prospects. Prospects are not being shown the value of dong business with the salesperson. If salespeople selling the same products or services are all viewed alike, then price is the only factor separating one from the other. Unless a product is clearly differentiated from its competitors, the price issue will be a constant problem. Even if the products are nearly the same, there are always ways to differentiate, such as service, delivery, product durability and company reputation. Prospects don’t buy products or services on price – they buy them on value.
  3. Are salespeople out of step with prospects? What salespeople want to sell isn’t as important as what prospects want to buy. Customers are more sophisticated than in the past. Some salespeople continue to sell products that no longer meet prospect needs. Price objections may occur when the product or service doesn’t meet prospect needs.
  4. Did salespeople fail to educate prospects on the value of doing business with them? Many price objections are raised because salespeople fail to take the time and effort to make prospects understand they’re buying a company as well as a product or service. The price can be higher than the competition as long as the prospect feels it’s justified in terms of the values and benefits offered.
  5. Did the salesperson anticipate the prospect’s arguments about price? Some prospects open with unreasonable demands just to see if a salesperson will cave. Successful salespeople view pricing as a problem-solving process, exchanging ideas and information and generating creative tradeoffs and alternatives.

Adapted from Break the Rules Selling by John Graham. Mr. Graham is the president of Graham Associates in Quincy, MA.

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