Under Pressure: How to Handle Price Concerns
For many up-and-coming salespeople, and seasoned veterans, price objections are a common fear. And for good reason. When you don’t handle these situations well, you risk giving away too much in price concessions, or even unraveling the sale altogether. That’s why it’s important to carefully navigate these situations and treat each one based on its own unique considerations.
It’s not news that salespeople are motivated to write orders and get contracts signed. If they’re not conscious of whether the prices they’re quoting are acceptable to their buyers, then they may not get the order, hit their quota, or win the award trip to some tropical place. Needless to say, a lot is riding on getting the price right and salespeople are sensitive to price pressure because of it.
Before I dive in further, I have to address some terminology. If you’ve ever tuned in to an episode of Modern Sales Straight Talk with Mike Kunkle and me, you have probably heard us talk about language choices around sales. “Objections” is one of the terms we tend to… object to. Why? Because the buyer isn’t necessarily “objecting.” More often, buyers either have a concern about the price, or they’re simply trying to negotiate to get the best terms they can. So, to the extent that I use the word “objection” in this article, it’s because it’s a common term used to describe the exchange that is either a bit of haggling, or an actual concern.
What’s Behind the Buyer’s Concern?
The truth is, not all price concerns (or objections, pressure, pushback, etc.) are coming from the same root cause for the buyer. Yet, many salespeople have been trained with standard scripts for responding to these situations that over-simplify the situation and don’t respond to its nuances as a result.
The traditional, best-practice response typically involves reinforcing value to substantiate the price, rather than discounting or giving in to haggling. For certain types of price concerns, this can work quite well. For others, it’s not really addressing the real concern that the buyer has. That’s why it’s important to understand what’s really behind the buyer’s “price objection.”
As I alluded to above, buyers often apply price pressure just to see what kind of deal they can get – and gain additional satisfaction from knowing that they indeed got a good one. That’s why the first thing you, as a salesperson, need to determine is whether the buyer is simply trying to save a few dollars, or they have a true concern about the price that is giving pause about their purchase.
Get to the Root of the Price Concern
When a buyer applies price pressure by saying something like “Ooooh, that’s more than we were anticipating,” it’s important to “peel the onion” and clarify what they mean by that. Maybe ask something like, “Ms. Customer, is there a reason you were expecting a lower number?” This is where it starts to get interesting. Once you get to the root of the concern, you may find that it can be one of several different issues. Here are four ways we distinguish among different types of concerns in our Modern Sales Foundations program.
Example: “I’m not comfortable investing that much without knowing that it’ll work well with our existing processes.”
Example: “$18,000 up front is a lot to spend before it’s even implemented.” (A Distortion assumes that the buyer is incorrect; for example if the $18,000 is only paid once implementation has completed).
Example: “For that price, I’d expect to have a dedicated customer service agent. The other company we’re looking at offers that.”
Example: “$70,000 is a lot more than we were expecting. We hadn’t budgeted that much, and we won’t have additional funding available for another nine months.”
If you can’t determine which type a specific price concern represents, peel the onion and keep asking questions until you do. Ultimately, it’s going to fall into one of these four categories.
Understandably, these four variants of concerns would need to be addressed differently. Simply discounting as though it’s a negotiation situation won’t necessarily solve any of them. Reinforcing your value proposition might not either. Instead, you need to address each price concern based on its unique characteristics.
Respond to Price Pressure Based on the Specific Concern
The four distinctions mentioned before also reveal how important it is to not jump to negotiation. In the cases of Disbelief, Distortion, and Disqualifier price concerns, simply lowering the price has a slim chance of addressing what’s really giving the buyer pause.
A Disbelief concern should be resolved by reinforcing value and the path to success. When there is a Distortion concern, correct the misunderstanding. When it’s a Disqualifier concern, step back (if possible) and revisit the funding situation to ensure the buyer can actually pay for your solution. Disadvantage is the unique situation where your solution lacks something important for the price or includes something undesirable. Technically speaking, this is the only type of price concern that should warrant negotiation – but do so tactfully as a well-trained negotiator.
Don’t Confuse Selling with Negotiating
Ultimately, it’s important to be sure to do what you can in order to separate your sales job from your job as a negotiator. Buyers who are well-trained negotiators have been known to plant seeds of haggling early in the sales conversation, by anchoring early and establishing that they are going to need a lower price or better terms.
Again, buyers commonly just want to get your product at the best price they can. Buyers are good at this, and it’s often a learned behavior based on receiving concessions from salespeople when they apply pressure early and often.
In these instances, it’s critical to get to the root of their concern and reinforce the areas you need to. Even if they’re simply haggling, you can dig in and address any weak spots in the case you’ve made for your solution as a response to their negotiation tactics. Is it a funding or budget issue? Are they not seeing the value clearly? Do they misunderstand the path to ROI?
Whatever it is, address areas of concern around pricing based on what’s really going on with the buyer, instead of jumping to concessions or simply working to restate the value of your solution.
The models for responding to buyer concerns presented in this article are a part of our Modern Sales Foundations virtual sales training program. The program teaches sellers to approach everyday sales situations with a buyer-centric mindset to align with buyers and improve sales results.
For in-depth knowledge to handle “price objections” with a buyer-centric mindset, be sure to tune in to our webinar A Better Way to “Overcome Objections.”
Modern Sales Foundations™
Use a buyer-centric approach to improve sales results
Modern Sales Foundations™ (MSF) is an end-to-end virtual sales training program that teaches sellers the buyer-centric strategies and approaches needed to excel in today’s marketplace.