Early in my sales career, I worked for a promotional products importing company in California that was very entrepreneurial. The president of the company would often get distracted from his core business and pursue a good idea, just because he thought it had potential in the market. Because of this, I had the opportunity to work side-by-side with a golf pro, who had a very direct way of handling price objections.
The president of the company had fallen in love with a golf training product, and hired Rod, a golf pro, to help promote it. Rod worked in the office next to mine (this was in the days before cubicles were the norm).
One day, I heard Rod say something into the phone that I later learned was a response to a price objection (i.e. “your price is to high”). In a very direct, almost sarcastic voice, Rod said:
“Compared to what?!?”
I was pretty new to sales, and still a bit on the nervous side when dealing with customers. His approach absolutely stunned me. I asked him about it, and he was very convinced that his approach was correct:
“Listen”, he said, “people pay me 20 times the price of this simple training tool for an hours worth of private golf lessons, and after the hour is gone, I leave. This training tool, on the other hand, is something that people can use anywhere they can swing a club, and they get instant feedback on their swing that is even more accurate than watching how the ball flies or hearing what a golf pro has to say. To object to the low price of this product is to not understand the value it offers. Anyone who objects on price is an idiot, and needs to be told how to value what they get from this thing”.
Now Rod was a pretty crusty old guy, and I am not a big fan of the style with which he delivered this objection response. However, with respect to his logic, he couldn’t be more right!
Too many salespeople hear a price objection from their prospect and agree with it. Then they run back to their company and demand a discount so that they can make a sale. The problem with this behavior, is that the salesperson is functioning as a semi-automated price tag. It is as if there is a basket of apples with a sensor and a digital price display. If a prospects walks up, sees the price and starts walking away, the display emits a signal, and drops the price 10%. This process repeats until the price is just above cost, or the prospect buys – whichever comes first.
In this case, the salesperson has not established sufficient value in the mind of the prospect. This salesperson is not acting as an expert, as we discussed in the blog series about the importance of expertise. This salesperson is not serving himself, his company OR his prospect well. This salesperson can also be easily replaced by another message runner, or when the technology allows, and someone actually builds it, our automated display!
Only the most Neanderthal of prospects shop on price alone. There are fewer of them than you think. The truth is, almost nothing is bought on price alone. No-one in their right mind would buy on price at the expense of quality, reliability, in some cases warranty, packaging, delivery time, etc.
Do you, for example, buy on price? You might think you do, but you probably don’t:
- Do you buy the cheapest shirt in the store, regardless of style, fit and color?
- Do you drive the cheapest car available, or did you pay a bit more for a car you like?
- Do you use the cheapest mobile phone?
- Do you eat at the cheapest restaurant?
- Have you ever had a coffee at Starbucks?
If you said yes to any of the questions, there is something other than price at work here. It is true for your prospects as well. There is some kind of value that is driving your decision. It needs to be in alignment with price, but is not subservient to it!
What prospects typically want from a salesperson – without even knowing that they do – is an EMOTIONAL assurance that their decision to buy from the salesperson is a good decision. They don’t want to make a mistake. They want to make sure that the product they buy matches up with their values (which may include organizational values from their work place). They want to be sure that your product or service comes at a fair price relative to other options, AND to this value that it provides.
A salesperson can help make this happen with a thorough needs analysis to make sure that the problem that the prospect needs to solve is solvable by the product or service that the salesperson offers. Once this assurance has been made, value has been established, and assuming that the price of the product or service is in alignment with the value that has been established, a price objection should not be a major hurdle.
This is not to say that some prospects won’t play the pricing game with you – some people just like the feel of a good haggle. Even in this case, the salesperson who has established value based on a thorough needs analysis and the presentation of a solution that meets as many facets of the prospects needs as possible has more leverage in the negotiation than one who simply offers the lowest price.
Don’t be the low price provider! Before you know it, someone else will have a slightly lower price, and your choices at that stage are limited, and undesirable.
When a prospect argues that the price is too high, it is because the value has not yet been adequately established. Period. Establish value before offering a price, and put yourself and your prospect in the best position to make a deal that everyone will be happy with.
Authors note (AKA shameless plugs)
So, this 7-step sales process and associated topics…. Yup, I write about that a lot. I’ve been working with it since I developed it about 25 years ago – in my own diverse work experiences, with my teams when I had them, and with clients ever since.
If you would like to develop you own personalized and customized, highly effective and efficient B2B selling system, here are some further steps you can take:
The Salesman’s Guide to Dating is a free or very cheap (depending on Amazon) Kindle book that walks you through the sales process using the familiar analogy of dating. It’s a good, fun and quick way to get your mind around the whole process and how the pieces fit together.
Building Your Sales Process (BYSP) is a free and very thorough exploration of the same 7-step process that will walk you through the development of your own customized, personal B2B selling system. When you are done, you will know exactly what to do to get new business.
The Momentum Selling System® is an inexpensive but very robust online sales training course that is similar to BYSP, but goes deeper into the concepts behind each of the steps, and also helps you develop a plan not only for the 7-step process but also addresses mindset, repeat business and client base management.
If none of that sounds right, I do personal coaching and offer a free 30-minute intake session so that we can both learn if it makes sense to work together 1-on-1. If this sounds interesting, click over to the coaching page on this site and sign up for the free session.
Here’s to your success!