When you are selling your products or services, how do you handle the objection that you are too expensive? Andy Preston of Outstanding Results has four ways to help you sell without having to resort to discounting
I recently noticed a fellow professional speaker post on his Facebook page that a potential client had told him that the fee he wanted to charge them to speak was "too expensive". He went on to say he was a bit surprised, as he doesn't normally get that kind of reaction.
Now I know this particular speaker pretty well, and I know that he's good value for money, but what was most interesting was one of the responses to his post. The person who commented wrote, "You can't be too expensive. And you're value for money. They must have cash flow issues!"
Now whilst I would agree the speaker concerned is most certainly value for money, there are four quick things we can learn from the other person's comment.
1. People's beliefs are reality - to them
The problem I see here is that I think you can be too expensive! One of my favourite sayings when it comes to sales (and pricing in particular) is that people's beliefs are reality - to them.
If someone says "that's too expensive" it may be that in the moment they do consider you too expensive - as long as it's not just a negotiation tactic to bring your price down of course.
But there will be some context behind them saying that. They might think it's too expensive compared to their budget. They might think it's too expensive compared to what they've paid in the past. They might think it's too expensive compared to what they were expecting to pay.
However, unless you deal with the fact that right now, they consider you too expensive - it's unlikely you're going to be able to win this deal, and bring them on board as a customer. Fail to change their belief (and therefore their reality), and you'll fail to pick up their business.
2. It's not their fault - it's yours!
If someone says to you that you're "too expensive", make sure you don't dismiss them (and the sales opportunity) too quickly. As an ex-sales director, I often used to hear my team come back from new business appointments with excuses like "they weren't ready to buy", "they didn't have the budget", and "our price was too rich for them".
My response was usually something like, "Ahh, so you failed to deal with their price concern then?"
My belief is that the majority of the time, a price concern (or price objection) is normally the salesperson's fault, not the prospect's.
It might be that:
- The prospect doesn't see enough value in your offering to think it worthwhile paying the price you asked for - that's your fault for not positioning your value to them correctly!
- The prospect doesn't have the budget to pay the price you want - and that's your fault for not finding that out, or speaking to the person who can make a new budget!
- The prospect has bought a similar product/service in the past and not paid anything like the price you want to charge them now - your fault for not finding out their buying history and positioning correctly against it!
- The prospect won't get enough value from your offering, in order to generate enough ROI to justify the purchase - your fault for not qualifying the sales opportunity well enough in the first place!
How many of the above are you and your team guilty of right now? Stop putting the blame for price concerns on the client, and see what you and your team could do to handle them better.
3. Find out - or set - their expectations
One of the biggest reasons people get price objections is that the price they want to charge isn't what the prospect was expecting to pay.
This often occurs when the salesperson fails to find out, manage, or - on some occasions - set the price expectations of the prospect.
In the old days, sales managers used to lecture their reps to "make sure you get the customer's budget before talking about price".
Back then that was pretty solid sales advice, but these days people don't always have budgets. They don't always have cash available right now. But they always have price expectations. And if you don't find out what they are and re-set them if necessary - or even set them in some circumstances - then you're always going to struggle with objections to your price.
How well do you and your team set prospects' price expectations currently?
4. Qualify harder early in the process
Another reason I find that salespeople come up against price objections is that often they're sitting in front of (or speaking to) the wrong people. People that may not have the money to be able to pay the price the salesperson wants to charge, or have the authority (and ability) to find extra money if necessary.
This is usually caused by a failure to qualify well enough (or hard enough) earlier in the process. This often results in the salesperson spending lots of their precious time dealing with people that aren't able to buy what they offer at the price they want to charge.
Often this leads to the salesperson becoming frustrated, having to walk away from deals, or heavily discounting just to win the business - none of which are good outcomes for the salesperson.
How well do you and your sales team qualify your opportunities right now?
Follow the tips above and watch your performance and that of your sales team soar!