One of the most common objections that sales development representatives (SDRs) face is the price. How can you handle a client who is unhappy with the price and still move them forward in the sales process? Here are some tips to help you deal with this challenge and overcome price resistance.
The first step is to understand why the client is unhappy with the price. Is it because they have a limited budget, they are comparing your offer with a cheaper competitor, they don't see the value of your solution, or they are just trying to negotiate a better deal? By asking open-ended questions, listening actively, and empathizing with their situation, you can uncover the real reason behind their objection and address it accordingly.
Understanding the root cause is important but from a strategic perspective, you also need to take a step back and checklist: 1. Even before you shared pricing, did you understand the problem/requirements correctly? 2. Did you ask the right questions, listen actively, and guide the discussions to solutioning? 3. Were the USPs/differentiators presented to the prospective client relevant to points 1 & 2. 4. Was the presented proposal iterated (with the prospect) to align with points 1 & 2 and designed to highlight point 3? If so, you should be able to defend your pricing and narrow down pricing differences to budgetary or competitor offering+pricing issues. If not, post facto root cause analysis flows from the above process.
Before jumping to the price directly ask Questions is important to justify the price, and after that if the concer is still the same we can follow these - (1) Ask Actice Questions, like why they think the price is high for them, Show genuine interest in their perspective and show empathy. (2) Listen carefully to understand their perspective, it helps to understand if budget is the only concerns or if they miss some product's value. (3) Clear the misunderstanding after figuring out the pricing concern, by proving the real picture of value and the impact that your product/service will create.
As sales professionals, it's important to recognize that customers may have different motivations for purchasing same product or service. Take, for instance, a simple haircut service, which can be sought for various reasons by different individuals. When a customer expresses dissatisfaction with the pricing, it's crucial to delve deeper into the purpose of their purchase & then articulate the value of the offering specifically tailored to that purpose. Customers may not always be able to articulate their purposes clearly, so it's essential for salespeople to ask open-ended exploratory questions, conduct site visits, and gain a comprehensive understanding of the customer's situation by assessing their environment and other relevant factors.
Before even getting to this point, it would be easier asking about their budget and moving from there. Check list would include: - Budget expectations - Feedback from proposition - Aligned value If the value is there however the budget isn't is there something feasible for both parties?
"In comparison to what?" ... "how much would you value the product I have shown you?" .... "based on the cost-saving our product is giving you back, wouldn't you agree in fact you are making money as a result?"... If the customer is stuck on price, it's because they aren't sold - simple as that. So now you need to go back and reverse-engineer where you lost them. What part of the demo/pitch did you skip over or omit but ultimately you have almost certainly missed something.
The next step is to demonstrate how your solution can solve the client's problem, meet their needs, and deliver a positive return on investment. Instead of focusing on the features and benefits of your product or service, focus on the outcomes and results that the client can achieve by working with you. Use stories, testimonials, case studies, or data to show how you have helped similar clients in the past and how you can help them achieve their goals. Also, highlight what makes your solution unique and different from your competitors and how that can give the client an edge in their market.
Value selling is the art of focussing on the benefits and help the customer choose the right product There are 7 areas where customers look for Value 1) Trust in the brand and the person selling the product 2) The total cost of ownership should be lowest not the initial price 3) The product should be doing all the aspects it should be supposed to be doing 4) The product should be reliable at all times 5) The support for the product should be easy and promptly available at all times 6) The user of the product or service should also be happy 7) The sales professional should be solution centric Excerpts from my best selling book ?? *7 Value Drivers for Success in Sales* available in Amazon
Its important that the client should understand the reason behind the pricing. - Highlight the unique benifits of your product/service, Explain how your offering solves specific pain points or exceeds expectations compared to competitors. Show them how you will benefit in their success. - Try to explain the effects in numbers or quantify it, by telling how your product will helps in "xyz" increase revenue and profits of the clients. - Make sure to show some testimonials of the past customers, show the success stories. To build confidende and trust about the product.
Start with a value mindset which includes 5 simple steps 1) Absorbing the problem statement in depth 2) Doing a joint scoping activity, if it requires you to draft a document from scratch. Just Do it! 3) Demonstrate your product with an available feature set. It's okay if you show only 50% of requirements 4) Communicate how you will bridge the delta 50%, minor changes, tweaks, custom build and commit timelines on paper 5) Do a commercial workshop and demonstrate TCO keeping the final scope in mind. Trust me you do this bit and the difference in price in the customer's mind and your expectations will be minimal. Simple eh? #SalesAbundancebyMG
This is the most difficult yet the most important step in getting what you want as prices from the customer. A customer will always try to get the best price out of you for the best possible product and services. There is nothing better than success. Past and present success stories are a great way to improve the perceived value of your product or service. A very powerful method is to use the voice of happy customers of past and present. We always tend to justify our decision about what we purchase as our best decisions, this is typical buyer behavior. So a customer with reasonable satisfaction can vouch for your products/service to his peers because in the process he/she is justifying own decision.
Testimonials of existing customers go a long way in the believability factor. Competition discussion is a strict no-no because that is a trap which customers spread out to get a favourable price point
The third step is to offer the client some options and incentives that can make the price more palatable and attractive. For example, you can suggest different payment plans, discounts, bundles, or add-ons that can fit their budget and preferences. You can also leverage urgency, scarcity, or exclusivity to create a sense of FOMO (fear of missing out) and motivate the client to act fast. However, be careful not to devalue your solution or give away too much for free. Always make sure that you get something in return for any concession you make, such as a referral, a testimonial, or a commitment to the next step.
Make sure to offer options ( BATNA ) - Offer a range of options with varying features and price points to cater to different budget constraints while maintaining value. - At first propose the basic plan, and based on the requirements scale the budget with telling the importance of the costomization.
Ask questions to understand why they feel the price is too high. Explore their needs, budget constraints, and expectations as well.
Offers and Incentives in today's times are open and known to all the customers. Thanks to easy access to communication across the marketplaces. So, be transparent on what is the ongoing offer and incentive programs in the company. If you are offering anything on top, then be careful because that can lead to information flowing to another potential customer immediately or in due course of time. However, this call is best taken collectively as the leadership team/management depending on the impact of the current deal on business volume and the importance of the customer in the present condition and the future business potential. This is an easy step, but not effectively used, it can boomerang at a later date and impact the business.
The fourth step is to handle any objections or rejections that the client may still have after you have presented your options and incentives. The key is to not take them personally or get defensive, but rather to acknowledge them, validate them, and overcome them with confidence and evidence. Use the LAER model (listen, acknowledge, explore, respond) to handle objections effectively and show the client that you understand their concerns and have a solution for them. If the client rejects your offer, don't give up immediately. Try to find out the real reason behind their decision and ask for feedback. You may be able to salvage the deal or at least learn from the experience and improve your approach for the next time.
An objection is not a rejection Novice sales people take the initial objection as a NO and do not proceed further An smart or a professional sales person sees objection as a doubt and tries to probe the real reason for the objection The objection could be because the client is 1) Not ready to decide 2) Not having enough money 3) Unsure about the product or support 4) Has had a negative reference 5) Does not know which variant to buy 6) Still want more options 7) Lacks trust in the salesperson or the product With right questioning the exact objection can be figured out and then the sales person can address with data and testimonials Research has proven that a customer on an average says no 4-6 times before saying to a yes
Empathy plays a great role in this - - Acknowledge their concerns and try to resolve it, and make sure to inform the reason behind the concern. - Prepare responses to common price-related objections like competitor comparisons or budget limitations. Focus on the unique value you offer.
While giving the sales pitch or the proposal, a smart sales guy needs to pre-empt the objections. With experience and wisdom, anticipated objections can hit bull's eye. If you are new, a team can help. Like they say, it takes two to tango.
Explore a compromise. This might involve offering additional services, discounts, or a personalized solution that meets both their budget and your bottom line.
The final step is to ask for the sale or the next step in the sales process. If you have done a good job of understanding the client's needs, demonstrating value, offering options, and handling objections, you should be able to close the deal or move the client closer to the decision. Use a trial close or a direct close to ask for the sale or a confirmation close or an action close to ask for the next step. Make sure that you are clear, confident, and assertive when you ask and that you have a clear call to action for the client. Also, follow up with the client until you get a definitive answer and keep the momentum going until the deal is done.
As per question, customer is not happy only with the price, so its the final price negotiation time. Make him happy, add some values to the offer instead of discounting further and show him the savings. A salesman has to be ready with the value addition schemes/offers. Be wise and offer what needed to close the deal not all at once. A sales man has to always keep price buffer for negotiations and some pre-worked value addition schemes/ kits to manipulate the deal then the chances to close the deal will be very high. Make value addition kits 1. Annual Maintenance Contract 2. Free service kits 3. Extended warranty 4. Extended components warranty 5. Best EMI options 6. Best Rate of Interest It’s important to add value to the offer.
ransparently explain the cost breakdown, outlining why the price is set as it is. This can sometimes alleviate concerns if they understand what they are paying for. Reassure the client of your commitment to their satisfaction. Building trust through transparent communication and a willingness to find solutions can often salvage the relationship.
Know When to Let Go: Sometimes, despite your best efforts, a client might not be willing to pay the proposed price. In such cases, it might be better to gracefully accept their decision and focus on clients who appreciate the value you offer.