Estimated Read Time: 15 Minutes
Your sale is going great. You’ve answered questions, provided samples, and put so much work into this project.
Then the dreaded phase comes up. The one that everyone gets to their dismay– it costs too much.
We all know it. And we’ve all dealt with it.
Although price is a legitimate reason, there are often hidden meanings behind the objection.
That’s why we wrote a blog guiding you on how to respond to sales objections.
However, the price objection comes up often enough that we decided to take a deeper dive into the subject.
Steps When Responding to an Objection
Before we delve into specific response ideas, try this 4-step process when handling an objection.
- Listen.
When you first hear an objection, the first thing you want to do is respond. However, you must fight this instinct.
If you immediately address the objection and move forward, you’re leaving hidden and un-voiced objections lingering beneath the surface issue.
Ask the prospect, “What else?” or “Why?” Get to the heart of their concerns. And be sure to give them room to speak. Listening – active listening – is a vital skill here. And it’s ok if the room gets quiet as they ponder the question.
You might find that the first objection was not the real issue at all.
- Understand.
You must seek to understand the objection and where they are coming from. If you followed the first step, you know that many objections hide underlying issues.
This is where “why” questions come into play. Why is that? Why do you think that? What caused you to have that concern? Why is that important? Why are you looking for that particular feature?
- Respond.
After talking with your prospect, uncovering their concerns and understanding them, now you can address the objections. Be honest. If possible, work to resolve the issue immediately. But if the objection is something you need to look into, let them know. Be clear about the next steps you will take to get the information and when you’ll get back with them.
There’s no point letting an objection be out there longer than necessary and be sure not to leave any objection left unaddressed.
- Confirm.
Many skip this final step. But try to gain commitment from the prospect on the “resolution.” Ask if they are satisfied with your answer – you can’t assume that they are.
Ask if there are any other concerns or if they have questions. You can’t proceed until the concerns are addressed properly. Sometimes the answer might require another touchpoint/meeting to fully address because there’s no immediate answer or might require a special process.
These 4 steps are a simple, yet powerful process when dealing with sales objections. However, if you follow these steps, you won’t fall into the common pitfall of rushing to overcome sales objections too quickly.
15 Response Ideas to Cost Objections
As mentioned in the 4-step process above, before you respond, be sure to make sure that cost is actually the heart of the problem. And be sure to stop and listen to you clients before responding.
However, cost is often the focus-point of objections.
So, what can you say when you get the dreaded cost objection?
- “Would you be willing to buy a larger quantity to possibly obtain a lower price?”
This is typical in the promotional products industry, but not well known by the outside world. So, if they want to lower the price per unit, ask if they’re willing to buy a larger amount to get that unit price down a little.
Furthermore, this makes a set price for years to come and you can offer useful services to your clients like Stock & Release, Warehousing & Kitting, or Web-Based Client Interfacing.
- “Is there anything else besides price keeping you from placing the order?”
If your prospect has any other objections you need to address, this question should bring them to the surface.
- “I hear you. The best products are often more expensive.”
According to HubSpot and sales expert Geoffrey James, “a price objection isn’t ‘real’ until the customer has brought it up twice.”
So, the first time you hear, “It’s too expensive” can help you separate the prospects who truly don’t have the budget from those who are merely kicking the tires.
- “Is it a cash flow issue or a budget issue?”
This question gets to the heart of whether they are asking for a discount (budget) or payment terms (cash flow). Once you categorize the objection, you can negotiate, discuss value, or work out a payment plan more effectively.
- “Then let’s shuffle the dollars.”
Let’s say your awards program is budgeted at $50 per award, and many of your recipients repeat as winners from year-to-year. We understand that $50 doesn’t buy much, and you’re asking recipients to line ‘em up each year – something they’re not likely to do.
Therefore, shuffle the dollars. Look at the $50 per unit cost as a $250 per capita 5-year budget. Then spend $150 on the initial-year award, and $25 each on an update element to add to the award for subsequent years. (And notice we mentioned $25 for each update, not a $3 metal “tab” – that’s stopping short of doing it right and leaving your recipients feeling short-changed.)
- “Would you be interested in exploring some creative strategies for fitting this into your budget?”
Dave provides this tip in his 21 Insider Tips blog:
It’s a popular (and safe) belief that everyone is a winner. But the truth is recognition is a caste system by which the performers at the top end of the bell curve are the ones who are carrying more water. So why treat someone at the 90th percentile the same as someone at the 50th?
Using a hypothetical, let’s do the math:
- You have a roster of 1,000 potential recipients who you are measuring in some manner to establish a pecking order.
- You plan to award the top half with your recognition program.
- Your budget is $50 each, so the total spend is $25,000.
- That’s all fine and well, but does it inspire anyone to perform better than what is, by definition, average? And does 50 bucks really get you in the hearts and minds of the human psyche?
How about some new math instead:
- Take the top three tiers of performers, segmenting them into gold, silver, and bronze levels, for instance.
- Portion them into a group of 50 at the top level, then 100, then 150— that’s 300 total recipients.
- Allocate the budget points within these tiers at $120/$100/$60 levels.
It’s the same $25,000 budget, but it keeps the audience engaged and inspired to reach the next level. It still recognizes a large swath (30%) of your group but allocating the budget among a ranking system allows you to build a program on the precept of “good/better/best,” which is shown to be an effective motivator for increased performance and results.
- Show the ROI.
If you can’t show ROI, then your current customers won’t stay with you long and your prospects will be hesitant to work with you.
This also steers prospects away from thinking in terms of "expensive" or "cheap," and towards the long-term value for their business.
So, consider doing one of these two things (or both).
- Put together a plan on how to track the ROI of the campaign or program. This holds everyone accountable, as well as allows for changes and potential for growth.
- You may have to prepare a formal pitch for either your prospect or his/her manager, either using internal numbers provided by your contact or customer case studies (suppliers can sometimes assist with this). Answering with hard numbers (and a little storytelling) may be the answer.
- Dollarize the benefits of your product.
As mentioned in our Sales Objection blog, all too often, we don’t help the buyer understand exactly how our product will help their business, especially in dollars. So, try dollarizing by pairing the prospect’s ROI with their own data and dollarizing the financial consequences of passing up on your product/program.
Not sure how to do this? In regards to an awards program, consider using stats and calculating the cost of employee disengagement for the company, or whatever fits for the goals of the (recognition) program.
- Ask why.
Ask why they think the price is too high. Why is it outside of their budget?
Dig deeper. Ask questions to learn more but be sure to give them time to respond. Silence is your friend.
Pause for three to five seconds. Hit the “Mute” button if you have to in order to resist the urge to respond immediately.
- “Compared to what?”
What are they comparing the product to?
“Expensive” is a relative term. Find out what the prospect is comparing your product/service to so you can best respond (and precisely differentiate value).
- Agree, but flip the script.
According to Tenfold.com, sometimes you just have to agree with the prospect to get them to agree with you. Doing so will soften your image to them from being the hard salesman to someone who can empathize with them. When this happens, their guards come down and you can speak rationally.
Example:
Client: “The price is too high.”
You: “Yes. I absolutely agree this is a huge investment. See, I know this product adds immense value. The price point is set here because (benefits). If it were cheap, then it wouldn’t be effective or valuable to your (target audience), right? This product can do/help X.”
- “Have you ever bought a similar product before?”
It’s possible that the prospect has an inaccurate idea of what this type of product or service costs - perhaps because they've never purchased it before. With this question, you can clear up any misconception.
- “I understand. In fact, I had two other customers just like you who were uneasy about the price at first. But what they found was…”
Empathize with the prospect, and then address their concerns with a strong case study that proves value.
- “Thanks for your honesty. How much were you thinking of spending?”
The prospect's answer will reveal whether you’re in the right ballpark or playing in a completely different state. This response also turns the conversation back on them, so they're forced to take a stand or admit they were bluffing.
Please note, that getting a realistic budget is a vital part of the process, so be sure to get that early.
- “I don’t want to force you into something here – but I also don’t want you to miss out. Is this something that would be less of an issue for you next quarter?”
You never want to rush a deal that's too discounted or too much of a stretch for your prospect. Offering a steep price reduction just to close a deal will do your business more harm than good over the long run. Furthermore, pushing a close your prospect really can't afford might lead to early termination or default on payment -- also not good for your business. Instead, be open to waiting until more budget opens up. A matter of weeks might mean the difference of thousands of dollars for your company and your commission.
But if you take this route, be sure to notify your supplier partners.
Each of these possible responses opens the door for more of a conversation, whether that requires proof of value or other needs. That’s why we created this blog – the most common sales objection could turn an objection into a delighted customer.
What’s your favorite price objection response? Tell us in the comments.
Kristina Hublar is your friendly neighborhood Marketing Specialist at Bruce Fox, Inc., which means she is the person behind the keyboard for the social media, emails, website, and other marketing efforts. In her spare time, you’ll find her plotting her next road trip, bobbing along to music while crafting, spending time with loved ones, or with her nose in a book.
