How to Overcome Your Price Objection

overcome your price objection

Have you ever noticed how things seem to happen together and it kinda seems like synchronicity?

Recently, I decided to listen to reggae music on Spotify while I work. I went from Bob Marley to Jah Sun all in one day. I enjoyed the vibe so much, the next day, I continued listening to Reggae music and expanding my knowledge of the genre.

That’s when, oddly enough, I got an email from a web guy focused on helping Dentists in Jamaica named Rickyle.

He had questions about sales and marketing, so we jumped on Skype for about an hour and talked. One of the questions he asked was on price. My answer essentially recapped Sandler’s thoughts on the price question. But because it’s alien to people, Rickyle still had a question about it and sent me an email.

Mike,

I remember in our call you mentioned that when a client asks price you kind of deflect it. Is this something you do all the time?

Don’t some clients hound you for a range at least?


Obviously Rickyle believes, as everyone else in the world believes, that not answering the price question is a deflection. But it’s not.

I’ve thought about price a lot over the past 17 years and I think I have a clear picture of it.

Here’s my reply to Rickyle. I hope it helps you understand why price isn’t really what is important in a sales conversation and begins to shift those beliefs that hold you back about price.

Shifting the Price Objection


Think about when you buy something. When do you want to know the price? You may think you want the price first, but every newspaper has ads from hundreds of products with the price right there in full view. When has the price sold you on something before you knew what it was? or knew you wanted it? 

I’ve paid attention to my behavior and I only want to know the price once I’m excited about the product and want to take advantage of it. Here’s how I look at a new SaaS product on the web (self-selling):

I go to the home page, and watch the video and read the page. Then I look at the features. Once I’ve built up an excitement about the product internally and I’ve started making movies in my head about how great it would be to use, that’s when I think … “but how much is it?” … and I go to the pricing page. Sometimes I’m greeted with an affordable price or reasonable payment terms and I snatch it up. Other times, I’m met with a ridiculous price that is not in the range of what I would ever pay for that feature set – no matter how well it worked.

That little scenario tells you two very important things about price:

  1. Price is related to value.
  2. Price isn’t a selling point. It’s a qualifier.

It may appear that I snatched up one product, but ran from the other because of price. But the truth is I did it because of perceived value. And influencing perceived value is the purpose of sales and marketing.

Think about value. Why is a Rolls Royce, a Rolex, or a Chanel purse so expensive? There are other cars, watches and purses that are much less expensive. But the less expensive ones are not symbols of status. Luxury brands do more for our ego than the function they serve. But that ego stroke is so powerful, it has a high value.

When I ask the average web designer, how much is a 5 page website? They give me a price on a generic 5 page website based on the hours it will take to create it.

As a salesperson, your job is to convert that question about the price of a website into a question about the value of a local marketing solution for their business that brings in new, paying customers every day. How much value would there be in a 20% increase in business for them? How much profit does that represent for them? Does that leave enough money for your solution to be a no-brainer? What will they do with the extra money? Will they go on a vacation or reinvest it back into their business so they can work their way out of the day-to-day operations of the business?

There are so many places you can go … that you need to go – to prove value.

A widget has only so much value. But a solution to my problem is worth a lot more. Remember, my problem is unique to me in some way. A different person may have a different problem and require a different solution. And that is where value can be created.

So it’s not a deflection to the price question by wanting to prove value before giving the price. It’s a service – to you and them – a win-win.

Proving Value


You must adopt, live, embody the attitude that your product or service is exceptional. It is a perfect solution to either a particular problem or a range of problems. It is not, however, the answer to all problems.

As a salesperson, your purpose is to pair your product with prospects who have problems your product solves. Sometimes that means helping the prospect realize they have the very problem your product solves and encouraging, questioning, and motivating them to take action on it. What it doesn’t mean is convincing someone who doesn’t need your product to purchase it. That causes problems for you, your business, and the customer … everyone loses.

In order to help you understand how to prove value, or “sell” value, here are example conversations between a prospect and a salesperson. These aren’t dialog as much as points of conversation.

Prospect: What’s the price?

Salesperson: How much would you pay to increase your business by 20%?

 

Prospect Answer 1: What’s the price!

Salesperson: between $20,000 – $40,000

 

Prospect Answer 2: You think you can grow my business by 20%, or $400,000?

Salesperson: Yes, but it’s going to require the following time and resource commitments. Regardless of the monetary price, are you ready, willing, and able to do something about your problem? Yes? Then I estimate it will be require an investment of $20,000 – $40,000 to do it. What are your thoughts about that number?

 

Prospect Answer 3: I’ve got about $1,000. Do you really think you can grow my business by $70,000?

Salesperson: Well no, unless you have a 70% profit margin and are willing to invest about $20,000 – $40,000 to do it, otherwise …  I don’t think it could happen. True, we could remove some of our services. There are things we can do to market your business, and you will probably see a return on your investment, but I can’t predict the success of them because marketing is fluid and unless you are constantly changing and up-ing your game, you run the risk of stagnation, not speaking the language of the evolving marketplace, and not seeing any return on your marketing investment. 

 

You’ll notice three things going on in the responses above:

  1. You want to control the price question because price is a qualifier for you and them.
  2. If they ask you the same question twice, answer it directly the second time (as seen in Prospect Answer 1).
  3. Price isn’t a separate conversation.

 

Price Is Not a Separate Conversation


No matter how common it is to try to separate parts of a conversation out and label them (ex. objections, closing), price is just a part of the conversation – like a thread of a tapestry – it runs through it.

However the reveal is not at the beginning. It’s more toward the end, and it’s only relevant once they, like all of us, are excited about what we could achieve when our problem is solved. The price isn’t relevant at all when you are prospecting – need, pain, a problem that you can fix is.

Good sales trainers teach salespeople to think of everything they need to know in order to qualify a prospect and make an inventory of it. Those will be the focus of the questions they ask prospects – their “qualifying questions.”

What 95% don’t teach because they don’t know is: You also need to understand (and know intimately) how selling your product/service affects the prospect (and their business), and you need to ask questions around those topics. What topics? It will depend on your product/service, but you need to know if there is an opportunity to sell (are you talking to the right person [this means many things]), do both you and your prospect have the resources necessary to be able to solve the problem effectively, and do they have the necessary motivation to see it through. Once you understand all of that, only then is price relevant to the conversation.

People aren’t motivated by price. Price is context dependent. On it’s own, $4,000 can seem like a lot of money, or pocket change depending upon your bank account and your ingrained beliefs about money. $4,000 is a lot for a meal at a restaurant, but minuscule for an automobile.

There is a larger reason for doing what you do and selling what you sell. Yes, money is not only great, it’s necessary. But successful businesses solve a problem (or range of problems) unique to a specific market segment. Yes, there have to be enough in the market who are willing to spend a certain amount of money so you can be profitable and remain in business, but in the end, the effective solution of the problem is what matters most.

And that leads me to a realization about questions around price like Rickyle had.

If you thoroughly understand and know the value your product/service provides and you firmly believe in your offering, then you won’t be focused on price. You will naturally put price in the right order in your sales conversation (at the end). 

Why? Because you will want to hear the story of the problem from the prospect. How it affects them. Then you will ask all sorts of questions around the issue so you can begin to formulate a diagnosis. You will get so accustomed to the issues you solve you could finish sentences for your prospects. You will be able to understand how their problem affects them, what they have tried to do about it, how much it is costing them, and how long they have had it. You will ask hypothetical questions about their level of commitment to change, and only when they are indeed a qualified prospect, do you introduce price.

If you do it any earlier in the conversation, there is no value for them to tie the price to in their heads and all you get is their gut reaction to a dollar amount based on how their life experiences shaped their beliefs about money.

Have Anything to Add About Price?


So what do you think? Do you have anything to add on price? Think I got it right? Think I got it wrong? I’d love to hear your take in the comment section below.


 

About Michael Miller

Michael Miller is the owner of Mindwhirl.com, a sales and marketing coaching and training company in Atlanta, Georgia.

Michael’s mission is helping small business owners understand, and organize their marketing so they can make money and grow.

Mindwhirl helps business owners plan and implement effective, profitable marketing campaigns and sales programs.

If you need more sales, we know how to get leads and grow businesses. Call us today at (404) 858-3105, or email me at mmiller@mindwhirl.com.

Comments

  1. Patricia E Miller says:

    with 35 years of DIRECT SALES under my belt, I can tell you that without doubt, you nailed it!

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