One of the most common objections you may face in direct sales is that your product or service is too expensive. How can you overcome this challenge and persuade your customer to buy from you? Here are some tips to help you handle price objections and close more sales.
Before you even present your offer, you need to establish your value proposition. This is the unique benefit that your product or service provides to your customer, and how it solves their problem or fulfills their need. Your value proposition should be clear, concise, and compelling, and it should differentiate you from your competitors. You can use testimonials, case studies, or demonstrations to support your value proposition and show your customer the results they can expect.
Price is actually never an issue. It is a question of value. If the customer sees value in the product/service, the price will never be an issue. Value differentiators can be quality, speed (responsiveness), excellent customer service, empathy and so on. The critical thing in my opinion is to find out what the customer values and then create a unique positioning around it.
In my experience, we should not focus on selling the products ..! Understand their main requirements and pain points and then create a solution that they should willing to buy .! End Customer always wants a solution not a product
The most important part is that one has to find out the pain point/ the hidden need to change / the unmet need . Only then one can put a benefit against feature for a better price realisation. Company Brand also delivers these needs such as a perception of better quality, better service, pride of ownership, etc . Sales people must use these intangible benefits which come with a higher position of Brand to negotiate better price. To find the hidden unmet needs sales team has to build a relationship of trust only then the customer will understand the benefits of the features in a product. In short leveraging product and brand features are essential for a better value proposition.
Price is always a factor. You can provide testimonials, case studies, and value proposition to you clients but if they own something today you are trying to displace, cost is always a factor. You always need to provide value proposition to the client but what many fail to mention is that can’t happen without a relationship/repor with the client. Understanding clients needs and how your technology can fill certain gaps or help automate processes they don’t have today helps present the value in your product.
Often buyers and sellers forget that price negotiations begin at the beginning and throughout the buying or sales campaign. Understanding the buyer's concept (fix, accomplish, or avoid) and their business is key to understanding if your product or service is a fit. If it is, you have to begin early to differentiate yourself from the status quo and your competition on the customer's concept of "value", differentiating on technical, operational, and financial value of your product or solution. Every sales play in the campaign should be used to demonstrate how your product or solution is "value differentiated". If done effectively and consistently relaying value back in terms of the customers' business concept, you can neutralize price.
When you reveal your price, you want to frame it in a way that makes it seem reasonable and fair. You can do this by using contrast, anchoring, or bundling. Contrast means showing your customer how much they would save or gain by choosing your offer over another option. Anchoring means setting a higher reference point for your price, such as the original price, the market price, or the competitor's price. Bundling means offering your customer a package of products or services that adds more value and convenience than buying them separately.
Rather than framing the price, I would suggest focus on how your product or solution or service that can help your customer tackle an issue, or what impact it's gonna give to your customer?
I never send pricing ‘cold’. I also accompany pricing with a proposal meeting or at very least a WebEx with a structure agenda typically consisting of requirements, roi, competitive view (if competition is known)
Pricing has a lot to do with value proposition. When you’ve successfully demonstrated the true value in your product/service, you’re able to get an idea of if the price is worth it to them, or not. When presenting the price and if they’re not wanting to move forward, allow your prospect to contribute their ideas and ways to make it work for both of y’all, reasonably. It allows the prospect to think deeper about the value, along with allows them to get a feeling that they are building something for them, rather than just choosing something.
Price framing is a marketing and psychological technique used to influence consumer perceptions of a product or service's price. It involves presenting the price of a product or service in a way that makes it more appealing or acceptable to potential buyers.
I agree with Ruxandra My first instinct is to clarify whether the concern about the price being too high is in comparison to other options or if it exceeds their budget. Once you have this information, you can adjust accordingly. Understanding the specific meaning behind their statement is crucial before taking corrective actions. It all boils down to the value your solution brings, as not all solutions offer equal benefits. Emphasizing that various options may meet requirements, but not all deliver the same value, is essential.
If your customer still objects to your price, you need to handle their objection with confidence and empathy. You can use the LAER model to guide you through this process. LAER stands for Listen, Acknowledge, Explore, and Respond. Listen to your customer's objection and try to understand their perspective. Acknowledge their concern and show that you respect their opinion. Explore their objection and ask questions to uncover the real reason behind it. Respond to their objection by providing evidence, benefits, or alternatives that address their concern and show the value of your offer.
In the current environment, a good price can stimulate the need to buy, this is an inevitable problem to consider, product pricing is extremely important need to pay attention to the problem, I think the point of our thinking should not be just to let the customer to accept our price, may need to focus on our market segment, the consumer can accept the price is what is the price of the product, and then produce this product. I think on this basis, we then bargain, the deal is more likely!
Drawing from Chris Voss's book on negotiation, there's a tactic I find particularly effective when a customer hesitates on price. Voss suggests asking, "Compared to what?" It's a simple yet powerful way to challenge the customer's frame of reference. In my experience, this often reveals that they're comparing your price to something that isn't a direct equivalent. From there, the conversation shifts to a more constructive comparison of value rather than just cost. By discussing the unique benefits and addressing any drawbacks of alternative options, you guide the customer to understand the full context of their decision. It's not about convincing them that your price is low, but that the value you provide is high.
When a prospect still continues to object to price, I start to wonder is it really the price? Or is it something else. Prospects always lie. I’m not being cynical but really think about it. Your product checks all their boxes, your product will be able to fix their current issues but still the price isn’t right. I like to use a negative reverse technique because it can strengthen your position. It can also really show the prospect if they really want your product or if they just aren’t that interested. That way you can move on or move forward.
Price is the easy thing to complain about. If a customer continually returns to the price and doesn't acknowledge the benefits which the product can bring to their business then there's a good chance that they're not particularly interested in making the investment in the first place. We refer to them as 'tire kickers' if they can't see past the price then their not serious. Nice things cost money, if you want a cheap product then you'll get a 'budget' service.
After you handle your customer's objection, you want to test their readiness to buy and move them closer to the final decision. You can do this by using trial closing questions that ask for their feedback, opinion, or preference. For example, you can ask "How do you feel about the price now?", "What do you like most about this offer?", or "Would you prefer option A or option B?". Trial closing questions help you gauge your customer's interest, satisfaction, and agreement, and they also give you an opportunity to overcome any remaining objections or doubts.
Trial closing is a powerful tool that should be applied early and often in the sales process in my opinion - not only after an objection has been given. I am suggesting that trial closes should be used frequently and from the beginning to proactively root out objections prior to the end of the sales process when the consumer inevitability feels the pressure of having to make a decision at the end of the presentation. By peppering in hundreds of small trial closes (questions) throughout your process, you not only are weeding out objections in a conversational manner, you are setting the pace of the interaction. You ask questions, they answer the questions. Now asking for the business feels like just another question, not “high pressure.”
Trial closing can include presenting joint execution plan. The joint execution plan details the remaining steps with timelines to close the transaction by a certain date. “Now that we have aligned on pricing, we clarified that our option delivers best business value to you, these would be the remaining steps to finalize our agreement. What would it take to execute on these remaining steps within this timeline?”Hear them out, how they would work through the execution plan, what changes they may want to make to the plan, and who else from their organization may need to be engaged. If they are not ready for execution of the transaction, they will probably surface more objections or roadblocks which you can address.
I've found that using trial closing questions in sales can be incredibly effective. When I asked a customer, "What do you like most about this offer?" during a pitch, it not only helped me understand their preferences better but also opened the door for further discussion and ultimately closed the deal.
Simply put, for me, it is a recap of the main issues they were facing and how our solution helped to solve them. If a trial is not successful, and the customer still wants to buy, the chances are that the Customer Success/Account Management team will have a hard time with that customer. For me, it is always important to deliver the value the prospect is expecting from our solution. That enables me to have a smoother conversation about pricing.
One of the most powerful ways to persuade your customer to buy is to create a sense of scarcity and urgency. Scarcity means making your offer limited or exclusive, so that your customer feels that they might miss out on a valuable opportunity if they don't act fast. Urgency means giving your customer a deadline or incentive to buy now, such as a discount, a bonus, or a guarantee. Scarcity and urgency appeal to your customer's emotions and motivate them to take action.
I’m not always a big fan of using the scarcity method. Going back to providing value, that is where it’s going to be most beneficial. Creating a sense of FOMO (fear of missing out), I’d say is reasonable, but the scarcity method is too much of a “car salesman” approach. Creating a sense of urgency is certainly acceptable and can be combined with the FOMO approach, but ensuring that all three (FOMO, Urgency, & Value) are being presented, will be better for your process and will hopefully help with the pricing concerns.
I completely agree with the importance of scarcity and urgency in sales. When I incorporated limited-time offers and exclusive deals in my marketing strategy, I saw a significant increase in conversions as customers felt a stronger drive to make a decision and not miss out on a great opportunity.
The final step is to close the sale and get your customer to commit to buying from you. You can do this by using closing techniques that ask for the order, confirm the details, or assume the sale. For example, you can use the direct close, which simply asks "Are you ready to buy?", the summary close, which summarizes the benefits and value of your offer and asks "Does this sound good to you?", or the assumptive close, which acts as if the sale is already done and asks "When would you like to receive your product?". Closing the sale requires confidence, clarity, and enthusiasm, and it also requires you to listen for buying signals, such as positive comments, questions, or body language, that indicate your customer's interest and agreement.
Closing the sale is about ensuring that the signatories have been lined up for the agreed on signing dates and that the signing process has been determined (i.e. electronic signing, how many signatures, who signs first). The closing stage is just about the tactical part of the signing ceremony. At the closing stage, there should ideally be no more objections, concerns, which should all be addressed by now.
When confirming the details to close, there shouldn’t be many surprises if you involved the right audience, asked the right questions, and received agreement from the start. Asking who the approvers are and confirming anytime a deal changes, knowing when they want it implemented early in the sales cycle is key to closing with confidence. Don’t be afraid to ask what could possibly hinder you from closing. Ex: Can IT hinder closing; although, they aren’t official approvers and it’s not their budget? Will procurement try to renegotiate? When you have agreement, use the prospect’s feedback to articulate the value in a meaningful way. Closing isn’t just about asking for the business but preparation from the start,
In my experience, mastering various closing techniques has been a game-changer in sales. I've found that listening for those subtle buying signals and confidently using approaches like the summary close or assumptive close has not only increased my conversion rates but also made the whole process smoother and more customer-centric.
Every product/service has a direct cost and indirect costs/benefits. Competing on price alone is often unsustainable as it is easily replicated by your competition. The key is understanding your customers business well enough to be able to tailor and/or communicate your product and service to their business. This will allow you to capitalize on the indirect costs and benefits that you can offer. The question is: what can you provide that is not easily replicated by your competition and adds tangible value to your customer that is quantifiable and can offset any reasonable price difference?
If the price is very high, the solution may not be as relevant to the client and does not represent added value or real benefit for your business; The price is fair when it is aligned with the client's real numbers, whether in loss of time, money or resources, if the solution is greater than what the client's pain represents then we are in the wrong place because no matter how much effort we make, they will not notice the benefit or return on your investment - and it will always be expensive. If you need to convince the customer to buy something, they may not even need it. On the other hand, if the client is already spending or losing the same amount of money, is just matter of common sense.