Some Do’s & Don’ts On Handling Price Objections

by Paul Castain on April 24, 2012

Don’t do this: Don’t automatically respond with “how much higher?” or “where do we need to be on this?” Doing so relinquishes control, put’s you on the defensive, diminishes the value of your widget and as a bonus, you sound like everyone else!

Put it into a context: Instead of defending your position, have the other party do the “splainin” as my friend Ricky Ricardo would say. When someone tells you your price is too high simply ask them “Compared to what?” Doing this buys you a few extra seconds to think (never a bad thing) and gives you options you would never have had if you just lowered the price. I’ve asked this question and had people say “Well it just seems high. We’ve never done this before” Does that give me room to maneuver? It sure does does! I’ve had people also tell me “Compared to my other vendor” My response to that is now one of several options:

Get confused: I get confused when I have done a thorough needs analysis prior and the prospect/client has told me that the other company dropped the ball. I will literally say “I apologize, but I am a bit confused. Is this the same company that missed the deadline, nickel and dimes you etc?

Get real: Sometimes a price objection is nothing more than a throw away objection to a much deeper concern.

Here’s how I check temperature on that one: “We can certainly address the price, before we do let me ask you, price aside, what else is on your mind? This approach helps to get ALL the issues out on the table. Once again, it buys time and helps me to direct the conversation.

Cash in your get out of jail free card: A “get out a jail free card” is something you must create in advance. Example: your client calls you in need of that 11th hour miracle. If you are able to come through for them, come through and document it by sending an email thanking them for their business and telling them you were happy to have helped them through their challenge. You can cash this in when someone repeatedly tries to beat you up on price. Don’t throw it in their face, but ask them how much those “11th hour miracles were worth to them.

Do not use this Monkey Style Kung Fu line: “Mr/Ms Prospect, I’d rather apologize once for a high price then repeatedly for bad service”

Use this line and you stink: “We offer quality, service or price, pick one”

Don’t be afraid to unleash your Whup Ass! Look them right in the eye and tell them that “the higher price comes with something the other company can’t offer . . .ME! Back it up with some evidence such as some testimonials, a specific example of how you helped a similar company etc!

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  • Kevin Galway

    Good post Paul, even as a seasoned salesman – it’s always good to get yoru emails and feel somewhat refreshed.  

  • Anonymous

    When price comes up as an objection it usually means you haven’t qualified well enough up front.

    But sometimes it is down to internal issues – budgets, spending limits etc. I’ve had it where, when I came back on price, he explained that under 5k, he could write me a purchase order today, above 5k he had to go through an approvals process. By separating maintenance into a separate invoice, I walked away with the full figure.

  • http://yoursalesplaybook.com paulcastain

    Thanks Kevin . . . What a nice note to start the day!

  • http://yoursalesplaybook.com paulcastain

    Great point and great suggestion Peter!

    Thank you!

  • http://twitter.com/MZazeela Marc Zazeela

    Thanks bud. I needed this reminder.

    Too often we go into defense mode when we should be making the prospect qualify their statements.

    Cheers,
    Marc

  • http://yoursalesplaybook.com paulcastain

    Its unfortunate that many times we are the ones doing the defending.

    Getting the proper context from the other person is critical and can give us more options than defaulting to “how much?”.

    Thanks for sharing your thoughts Marc!

  • http://www.linkedin.com/home?trk=hb_tab_home Dknoedler

    Money/price is always the hard conversation for me — but that’s why we are in business–so I can never truly figure out why.  Thanks for the post . . . Debbie

  • http://be.linkedin.com/pub/charles-henri-gaukema/a/5b/249 Charly

    Reminders, other points of view… I never go back disappointed. Each time I come her I find some helpfull stuff (sorry for the word “stuff” but my English vocabulary is still limited).  Thanks Paul. And if you ever come along to Belgium, I’d like to have a beer with you !

  • http://twitter.com/umf97 Michael Thompson

    As always Paul you help to outline items that are key to selling.  When reading this my mind immediately went to Zig Ziglar and bringing out the notepad.  Or as Zig Ziglar would say your “talking pad”.

    Thanks for the refresher!

  • http://yoursalesplaybook.com paulcastain

    Thank you Michael and thanks for the reminder on Zig’s “Talking Pad” . . . I can still hear Zig saying that and it immediately changes your state to one of collaborating instead of defensive.

    Thanks again!

  • http://yoursalesplaybook.com paulcastain

    Now that would be one fantastic beer and I look forward to that someday Charly.

    Thank you!

  • http://yoursalesplaybook.com paulcastain

    Thank you Debbie!

  • http://www.linkedin.com/in/markmillerca Mark Miller

    So true, Paul. Sales should not be a race to the bottom. We need to be as selective of our clients as they are of us.

  • http://yoursalesplaybook.com paulcastain

    “Sales should not be a race to the bottom. We need to be as selective of our clients as they are of us.” . . . Brilliant Mark!
    Thanks for taking the time to stop by and share your thoughts!

  • Tammy

    I find a lot of clients will object to the price because they think they are supposed to, not because they actually have an issue with it.

  • Jamie McLennan

    Perfect timing. Working with a client now on a project and the “price” objection came up.

    Thanks Paul

  • http://yoursalesplaybook.com paulcastain

    Go get ‘em Jamie!

    Thanks!

  • http://yoursalesplaybook.com paulcastain

    Great point Tammy and most sales people will play along by asking the “how much higher” question.

    I wonder how much we’ve lost as a profession because of that question?

    Thanks for stopping by and have a great Wednesday!

  • John

    If you ask “compared to what” and they say “compared to my budget”. IE.. Someone that is really just trying to get you to lower your price with no other reason other than getting a lower rate.

  • Francey

    Good points, all!  I love the pic-that was one great movie!!

  • Jabba

    lol…. I would offer up my “2 for 1″ deal. Pay for 2 – Get 1.

    Ah! Seriously though, in 40+ years of selling I have been  in places where all had very different attitudes on how and how much leeway to have in this area. I just work each deal to it’s best potential and of course making a full markup is always a good thing given all other aspects of the deal including most importantly a happy satisfied client are in place. Sometimes and some things being sold the price is not negotiable; networking and business class broadband services in the past come to mind. Then I might say, “I’m sorry I can’t do that but I can do this” and plug in the benefits or put emphasis on other aspects I may know as important to them. 

  • http://yoursalesplaybook.com paulcastain

    Very true John. Thanks for pointing that out!

  • http://yoursalesplaybook.com paulcastain

    I need to rent that movie again Francey!

    Thanks!

  • http://yoursalesplaybook.com paulcastain

    I agree Dan!

    Thank you for always taking a few minute out of your day to stop by and share your thoughts . . .they are always appreciated my friend!

  • Steve VanHove

    Jessie and I just did an 11th hour miracle for a longtime client – and immediately capitalized on it by asking them to catch up with a late payment! Have a great weekend, Paul!

  • http://twitter.com/GerryBowler Gerry Bowler

    I agree 99%!  My only objection is with the phrase in the final paragraph “the higher price comes with something the other company can’t offer . . .ME!”… That sounds a bit like “Don’t forget to tip the waitress!”.  I only say this because I’ve been the guy that pointed that phrase out when my competition tried using it!  When this comes up, I usually pull out a bag of cost savings I’ve documented for them and/or a list of open projects.  It usually redirects the conversation from a price battle to a deeper discussion of cost savings overall. 

    Otherwise….absolutely great post!  I appreciate the ideas of how to redirect the initial comment “Your price is too high”.  It’s not fair that too often, we do the work and someone else get’s the business by being a little cheaper!

    Thanks, Uncle Paul!!
    Gerry Bowler

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