May 3, 2021 • Podcast

How do I proactively prevent price objections?

On this episode, Paul illuminates the delicate balance of steering the conversation from price to value.

Show Notes:

Are you focusing on the right opportunities?

“Whoever is asking the questions on the sales call is in control of the conversation.”

“Ask questions that transport the buyer….” (into the future)

Surround the buyer with your message of value to influence their expectations.

Explain what makes you different.

 

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How do I proactively prevent price objections?

(Transcribed from podcast)

On a recent call that I had with a couple of sales leaders, we were talking about some upcoming training that we’re working on, training and coaching, and a common question that kept coming up was, “How do I prevent price objections?” And we were talking about how to manage them once they surface. But the real question that they were curious about is, “How do we prevent those price objections from actually ever happening?” So that’s what we’re going to answer on today’s show: How do I prevent price objections?

Before we get into that, a quick shout-out to our sponsor. Andrea, over at The Creative Impostor Studios, does a wonderful job on editing and really getting this podcast ready for you, the viewers. If you need some help or you need some support with your podcast, or if you’re thinking of starting a podcast, whatever it may be, reach out to Andrea and her team. We’re going to have a link over to her website on this episode’s webpage, so make sure you check that out.

Also pick up your go-to guide for selling value, and that is Value-Added Selling. We’re on the fourth edition of the book. If you want to prevent price objections, just read the book and do what it says. That simple. You can pick up your copy at Amazon or wherever you get your books.

So let’s get right back to that question. I’m going to give you a few tips, and this is right out of the book  Value-Added Selling. When we think about preventing price objections, it’s about steering the conversation away from price and towards value. And this is a delicate balance. There are several things that we can do. In fact, I’m going to give you guys five tips today to help you just take the focus of the conversation and put it towards value; prevent those price objections.

So the first thing we need to do is, we need to focus on the right opportunity. So many organizations I work with, the challenges that they face with price objections and all that is because they’re focusing on the wrong type of opportunities from the very beginning. They’re going after business in which they’re not competitive. So make sure you’re focusing on the right opportunities to begin with. There’s a simple exercise you can do to identify and create a profile of what the ideal target opportunity looks like. And how you do this is by looking at your existing customers. Look at your best customers. These are going to be your most profitable customers. These are the ones who never complain about price. They’re willing to pay your price because they need your value. Take a look at those customers and ask yourself, “okay, what do they have in common?” The overlap, the things they have in common, are going to be the profile for what you need to look for in your high-value targets. They’re going to look and feel a lot like your target prospects, because your best customers on paper look a lot like your best prospects already. So, first things first, just make sure you’re focusing on the right opportunity.

 The second tip is going to be ask the right questions. Remember, whoever is asking the questions is controlling the conversation. In fact, you hear that term in sales, always control the sale, and this is one way to do that. It’s to ask the right questions. So these questions need to focus on value and steer the conversation away from price. It’s amazing to me how often salespeople will inadvertently steer the conversation back towards price, and that ends up creating more objections. For example, if we walk into a customer and we start asking about projects that we can quote, or we start asking them, “Hey, what are you paying for this? Let me see if I can do a little bit better,” that’s steering the conversation towards price. That’s creating objections later on. So we need to ask the right questions.

The first type of question, we’ve got to transport that buyer into the future, and we do that by stretching their time horizon, by asking future-oriented questions and questions like this: “At the end of this project, what does the ideal outcome look like,” or “Long term, what’s important to you when making this decision?” These questions, they get the buyer thinking long term because it takes them out of the present. When they’re thinking in the present, they’re focused on price. Just remember that, when they’re thinking about the present, the short-term sacrifice they have to make, they’re thinking about price. We don’t want them to think about that. We want them to think about what they’re going to gain. So we have to get that buyer thinking into the future. Use long-term questions to do that.

Next type of question, ask questions that call attention to a competitor’s weakness. This is not bad-mouthing the competition, but if you know that your competitor is having quality issues, I would ask the customer, “How would you describe the quality of your current solution?” Or if you know that they struggled to follow up after the sale, “How would you describe the follow-up and support of your current provider?”

We ask questions that call attention to our competitor’s weakness and this will help create a need, establish a need for what we’re selling. And if they have a stronger need and a stronger desire, then price becomes less of an issue. So we’ve got to ask those questions that call attention to competitor weakness.

Now, once we do that, we also want to ask questions that highlight our value-added strengths. The reason we do this is pretty simple. We want to establish our strengths as the criteria from which they grade all the other options. So ask questions that call attention to your strengths. If your strengths are quality, if it’s technical support, if it’s engineering support, ability to customize, whatever it may be, ask questions that call attention to your strengths. So that’s asking the right questions.

The next tip, meet with higher-level decision makers. We did a study a couple of years ago, and we had every type of decision-maker you could imagine in this study. We had business owners, we had C-level executives, we had procurement buyers, operations people. We had a very diverse group of decision makers. Here’s what we found out; the higher the level of the decision maker, the less price-sensitive they were. The higher you go up within an organization, price becomes less of an issue. So when we think about that, why are we calling on those lower-level decision makers? I know that they’re part of the process and they’re going to be a critical part of selling our total overall solution, but if we don’t have an audience with those higher-level decision makers, then price is going to become more of an issue. So make sure that you’re working your way up the decision-making chain. So higher-level decision makers are key.

The next tip—and this is tip number four—position your solution as the benchmark from which every other solution is graded. You as the salesperson, remember, you get to control the conversation. And one thing you can do is get there earlier in the decision-making process. And when you’re there early in the decision-making process, you can surround the buyer with your message of value. That’s what we mean by positioning your solution. It’s surrounding the buyer with your message of value, with your value-added strengths. And the whole reason we’re doing this is to influence that buyer’s expectations, to set the benchmark. Because if they’re using our strengths and they’re using our criteria, they’re using our message to create the benchmark from which they grade everyone else, naturally, we are going to come out looking much better.

And as you position yourself as the benchmark, naturally, they’re going to be willing to pay a higher price. If you think about price in general, price is an indicator of quality and performance. And it’s a good thing, in that case, to be a little higher than your competition, because the buyer’s going to look at that and say, “Okay, there’s some reason they’re better. They must offer a better service, better this/better that.” Whatever it may be, pricing is an indicator of quality. So make sure you’re positioning your solution as that benchmark.

And then finally, the last tip-fifth tip of the day: Differentiate your solution. Buyers are willing to pay more if you can explain what makes you different. This is one of the most challenging questions we answer as salespeople. What makes you different? Being able to explain what makes you different justifies a pricing premium that you charge. So as a salesperson, you have to sit down, you have to put pen to paper; you’ve got to answer that question. And here’s the real kicker, once you identify what makes you different, then ask yourself, ‘Why is that meaningful to the customer? Why should they care about it? So, what is the real impact to them?’ If you just explain what makes you different and you don’t explain the impact, that’s not as compelling. So make sure you highlight what makes you different and why that is meaningful to the customer.

Make it a big day.

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