Why you're getting price objections

Pricing is perhaps the most stressful part of the proposal process, because that's where the rubber meets the road.

It's one thing for someone to say, "I'm interested, tell me more."

It's another thing for you to say, "If you're really interested, it will be $X."

"Pricing is the moment of truth- all of marketing comes to focus in the pricing decision." E. Raymond Corey, professor, HBS

The main reason pricing is stressful is that we don't know whether the prospect will accept the price, reject the price, would have paid 10X more, etc.

Of course, pricing "objections" are a natural part of business, and not something to fear. Do not optimize your business to avoid price objections. They are, after all, buying signals.

Here are common reasons for pricing objections, and what you can do about them.

Trying to sell to the wrong prospect

This is the biggest problem, the hardest to fix, and the one you want to identify earlier in your conversations.

Use powerful positioning to attract the right prospects (while signaling to other folks that they are better served elsewhere), and work to get to "no" instead of "yes" in the sales process.

Not understanding your Perceived Differential Value

We can sometimes get lost in the joys of our own solution, rather than digging deeper to properly diagnose the prospect's problem, our value in the solution, and the client's Perceived Differential Value in going with us, rather than an alternative.

Make sure you have real conversations with prospects. Avoid "happy ears" where you think everything sounds like "I need this", and also avoid cheesy ROI-calculator tricks to inflate the value of your offering. Dig in and be helpful. Note that in some cases, you may want to do a paid assessment.

Not communicating your Perceived Differential Value

If you don't know the PDV, that's one thing, but it's almost worse to go through the trouble to help the prospect uncover it, and then bury it in a pseudo-proposal that's really a brochure with a quote attached. I see so many "proposals" like this, and hear so many people complaining that the buyer just flips to the pricing section. That's because the price is the only meaningful thing you've given them!

Make sure your proposal tells a story, with the buyer as the hero. Make sure all that value is there, in the buyer's words. (I'll post a link to my "Fill-in-the-Blank" Consulting Proposal template in the comment section.)

Not giving Buyers a Choice

Sometimes, we don't know exactly what we want until we have a chance to see our options. We've all been in this situation as a buyer. We may even say, "I'd like Plan A, but can I get this one thing from Plan B that I really need, without all the other stuff?" It's not always possible, but we want to buy just what we need, and our prospects are the same way.

When necessary, give buyers a choice. It's up to you to construct the choices so you are happy whichever one they pick. (Don't offer a lowball option and then get upset if the buyer picks that one.)

When You Do Get a Price Objection...

Figure out if it's a real price objection, or just another way to say "no thanks".

Ask if they can get the price they want, are they ready to go? If they say "sure", then you can work on the pricing/value issue. If they hem and haw, solving the pricing problem won't help.

Using the tips above, you can avoid many price objections, but not all. But don't panic. You're not a fit for everyone. Price objections are healthy.

And if you do a good job, you'll see more of this...