What Do You Do When Your Prospect Says ‘Your Price Is Too Dang High?
What does this statement really mean? Don’t think too long…let me tell you. The prospect is telling you that they don’t see enough value in you offering given the cost of your solution. You have two primary options. 1) convince them otherwiseor 2) adjust the price accordingly…but proceed cautiously with #2. Neither of these two options are ideal so you want to figure out a way to get to a yes, but only if you’ve clarified whom your customer is.
Here are a few questions and tools to help you with both options:
Convince them otherwise
1) Rejoice/Empathize/Confirm the value of your solution — Your first reaction should be to rejoice when you hear objection from a prospect. That’s right…rejoice b/c now you have an idea of why they aren’t buying from you and you can address that specific objection. Prior to addressing the pricing concern please make sure that is the only objection from the buyer. If not, you need to get them all out on the table. Now it’s time to empathize.. Prospects don’t like sales people that aren’t authentic and they can spot them from a mile away. When I say empathize I’m encouraging you to acknowledge the prospects objections. Let her know that you hear and understand her objection. Now it’s time to circle back to the value (quantitative and qualitative) that your solution delivers for this prospect. You need to have the prospect reconfirm (I’m assuming you covered this in a previous conversion) the value of your solution to her company/department/primary objectives/etc. Start having a value discussion and position to price vs. the value delivered.
2) Push back — This may be uncomfortable for you. Think of it this way. If the client has confirmed that your solution is helping her meet an important corporate objective (e.g. solving a major problem , increasing revenue, reducing expenses, increasing brand awareness, etc.) then you have earned the right to push back. Still nervous about pushing back? Perhaps this study by CEB will give you some confidence. Note that “Challenger” reps are more effective and respected by clients. Important: Please challenge in a respectful and professional manner.
3) Reference — Highlight how their peers and/or competitors are leveraging your services and why?
Ask the prospect, “At what price would it make sense for them to buy your services?” The answer to this question will tell you a lot. If the prospect says he doesn’t want to pay for it then chances are you haven’t uncovered the real problem they are trying to solve in addition to the challenges the prospect is facing while trying to solve the problem. Regardless of whatever sales methodology you’re using, I’d encourage you to circle back and really try to understand the problem and challenges faced by the prospect. If the prospect wants to pay less than the proposed price point then you need to understand why. There is probably a simple solution (adjusting terms, reducing scope, shortening contract length, etc.) here that will allow you to close the deal.
Adjusting the price
I really don’t like this option, especially if your solution delivers real value to the client. There are some companies that will not budge when it comes to pricing. If you’re a SMB chances are you’re happy to make concessions within reason. In the spirit of getting a deal done, try this approach:
1) Don’t, I repeat don’t discount your price without getting a clear confirmation from the prospect that your solution is the only one that the prospect wants. And that price is the only issued preventing them from singing on the dotted line. If there is a clear confirmation then proceed to #2.
2) If/Then — This is an oldie but goodie. Ask your prospect, “If we do X, then can I count on you to execute this contract?” Simple question right? You wouldn’t believe how many people are afraid/uncomfortable asking this question. Get into the habit of asking this or some version of this question. It’s simple and powerful because it helps you cuts through all the minutiae.
3) If you have to discount pricing to close the deal, be sure to set expectations with the client that this is “promotional pricing”. And when it’s time to renew services and/or buy additional products you expect them to do so at traditional pricing. Obviously you can’t hold them to this promise, but it’s best to have the conversation right now to there aren’t any surprises months down the road.
Make it happen!
Thanks for reading. Please clap, share and reach out if you need sales strategy and advice. I love sales!