“You’re price is too high.”
Every sales person has heard this line at least one time in his or her careers (if you have not then you are the Superman of selling), and what is the typical reaction?
“Oh, well maybe I can discount the price for you.”
Red flag! While it may seem like the best option at the time, reducing the product’s price for the customer can have negative results. A customer may assume that what you’re selling does not have as high of a value as your competitor, or you may land the prospect but you will most likely never meet your bottom-line and your sales will not progress.
In his article “Does Volume Make Up for Low Price,” Mark Hunter explained, “Your ability as a salesperson is not in how much you sell, but in how much you earn for your company. It's the bottom-line profit that counts, and anytime you reduce your price, you're slashing your profit.” Handling price objections requires confidence and sales know-how. Instead of jumping immediately to reduction of price, sales reps should ask more questions. Ask, “Outside of price what are two or three factors that will go into your decision making?” When they answer this question, you will be more able to drive the value of your product.
Understanding your customer’s needs is the key. Once you figure out why they are in the market, then you need to explain to them how your product best fulfills their needs. If your price is higher then your competitors, explain why. Tell them the certain advantages and benefits that your product has. Justify the price.
If your sale truly does come down to a price reduction, then bargain and receive something in return. For example, tell your client you will give them the deduction, but in exchange, would it be possible for them to give you five qualified leads? This way, you are working together with your customer, but you also get something back Offer your employees sales training in the area of handling price objections so that when the situation occurs, they can handle it without reducing price. Once the training has been reinforced, sales and business opportunities will begin to grow.
How do you handle price objections? Share your sales techniques below:
