In our last issue, we shared a few tips on how to prevent your prospects from raising the
all-too-familiar "you’re too expensive" objection. This week, we continue
our discussion by focusing on a proven two-step formula that can help you handle any pricing
(or any other) objection, for those times when your ounce of prevention may not be 100% foolproof….
Step 1: Count to three!
Whenever you’re faced with a difficult question or objection, the first thing you
need to do is take a deep breath, make eye contact with your prospect and silently count
to three.
It is amazing how many clients will answer their own objections, or at least give you some
much-needed information, when you simply say nothing. Don’t be afraid of silence. Practice
it until the three-second pause becomes one of the most effective tools in your arsenal.
A couple of years ago, I was buying a new pair of glasses and having lenses put in an old
pair. The optician was clearly afraid to talk about price, and even went so far as to write
the estimate down on a piece of paper and pass it to me instead of saying the price out loud.
To my surprise, the number actually struck me as very reasonable. I had left my purse at
home, so I turned to my husband to get his wallet. The optician took my silence as an objection
and immediately dropped the price 15%.
This seemingly minor transaction was a great demonstration of the power of silence, and
the lengths most people will go to in order to fill it. In sales, you can use silence to
effectively handle almost any objection, particularly those related to price.
Whenever a client tells you your price is too high, just breathe and be quiet. You will
find that around 40% of all prospects will fill that silence with information you can use
to move the sale forward.
Step 2: Ask questions.
Step #2 is to ask questions. You can ask up to three questions before you have to answer
an objection – provided you ask the right questions in the right way.
The key is to acknowledge what the customer is saying and then offer them a compliment before
asking your question. For example, try saying something like "I appreciate you asking
that," "that’s a really great question," "I understand how
you feel" or "good point, I never thought about that!"
Including a nice warm statement in front of your question will encourage your customer to
answer it, because they will feel like you are giving them something first. The compliment
is a gift. It makes them feel that they are special, that you are paying attention to them
and that you truly care about them, and they will be more likely to respond in kind.
Which questions to ask?
Once you’ve paid the client a compliment, ask them a question that is both direct
and phrased to elicit more information. The following are some responses you can use to answer
a few of the more common objections.
OBJECTION: "Your price is too high!"
RESPONSES:
- Thanks for sharing that. How much too high are we?
- I appreciate your telling me that. Have you found a less expensive product?
- You are right, we are more expensive than some of our competitors. How much were you
hoping to pay? - You’re right, we are not the cheapest. Is price the only consideration?
- Thanks for being honest. Is the price higher than you expected, or is it because we combined
the services and training in one proposal? - I’m not surprised to hear you say that. Are we only too high overall or is our
per-unit cost too high as well? - Thanks for sharing that. Is our price a showstopper?
- I appreciate your honesty. Does our current price mean we will never be able to do business
together? - Too high? Really?
- What do you suggest we do?
- Thanks for letting me know. I’m curious, how much were you expecting to invest?
OBJECTION: We don’t have any budget.
RESPONSES:
- Budget?
- Oh! I appreciate that makes it difficult to buy. When does your budget come up for renewal
or review? - Thanks for letting me know. Is your budget renewed annually or quarterly?
- Does not having a budget mean we will never get a chance to do business together this
year?
OBJECTION: I need a discount!
RESPONSES:
- Discount?
- It’s good of you to be looking for the best deal. How much of a discount do you
need? Why that much? - Making sure you’re getting the best deal for your company is a good idea. If we
can’t budge on the price, does that mean it’s over between us?
Echo! Echo!
Another option for asking questions is to use the
ECHO technique.
The echo technique is simply the art of taking the
last word (or last important word) in a client’s sentence and turning it into a question.
One Engage client uses the echo technique every time one of their customers objects to their
price. They sell multi-million dollar custom software development services to companies in
the resources industry, so as you can imagine, they tend to face a lot of pricing objections.
Whenever a client says "I need a discount," their sales reps look them squarely
in the eye and say "discount?" Ninety-nine times out of a hundred, the customer
either tells the rep exactly what they need to do from a price and terms point of view to
move the deal forward, or offers alternatives to the pricing model that will make both parties
happy.
What could be simpler than that!
The start of a brilliant career
On a personal note, it was silence combined with a question that won me my first-ever professional
negotiation.
I was 22, fresh out of college and in my first sales job. I had never negotiated anything
on my own, and I was working with one of my company’s clients on a large employee benefits
program. Everything was approved when the client turned to me and said: "Hey, Colleen,
everything looks good. I just need a 10% discount."
I had no idea what to do, so I was quiet for a few seconds and then said something terribly
eloquent and persuasive, like "huh?" The client responded by saying he "just
had to ask," and we did the deal without the discount.
What’s the moral of the story? Don’t be afraid of objections. If you follow
this simple two-step formula – be silent and ask questions – you’ll find
that you can handle almost any objection easily and profitably.
PS: Missed last month’s tip on how to prevent pricing objections before they
occur? Find it at /articles/070626article_engageschoicehtml