Paul shares the three primary reasons buyers object on price and provides the “holy grail” of responses to those objections.
It’s critical to have a go-to response for price objections.
“The very first words out of your mouth when the buyer objects on price have to be….”
“You want to demonstrate fairness in your response.”
“Anytime you have a scarce resource like money, buyers will be fearful of misusing it.”
“When they don’t see a dime’s worth of difference, they’re not going to pay a dollar more for your solution.”
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What is the best response to any price objection?
(Transcribed from podcast)
Today on the show, we are answering the holy-grail question—the question I know that is constantly running through your mind. And that is, What is the best response to any price objection?
In sales, you’re going to hear thousands of price objections throughout your career—maybe tens-of-thousands of price objections. It’s critical that you have a go-to response. On today’s show, that is what I’m going to give you. I’m going to give you the go-to response for any price objection.
Before we get into that though, a quick shout-out to our sponsor, Andrea, over at The Creative Impostor Studios. She does an amazing job. She can help you grow your podcast, launch your podcast, give you advice. I’ve got to tell you, Andrea is such a pleasure to work with as well—easy to work with. And she always delivers on what she promises. So, please reach out to Andrea. If you are interested in starting a podcast, whatever it might be, or if you already have one, reach out to her. She can help out. There’s going to be a link to her website on this episode’s webpage.
Also, pick up your latest addition of Value-Added Selling. In one of the chapters of the book, we talk about price objections. And I will actually, verbatim, demonstrate how to overcome a price objection using the technique today. That’s in the book. Pick up your copy. Whether you’ve been in sales for one week or thirty years, it’s going to be your go-to guide to help you become more successful.
Let’s get back to the question: What is the best response to any price objection? Before we answer it, we need to give you a little background on price objections. There are three primary reasons why buyers object on price. The very first reason is because of a perceived lack of equity. They just don’t believe that your price is fair for the value that they’re receiving. And so, when you think about that, we have to demonstrate fairness. We have to show the buyer how our solution is a fair exchange for what they sacrifice in time, energy, effort, and money. You want to demonstrate fairness in your response.
Also, the second reason why buyers object on price is because of fear and scarcity. Anytime you have a scarce resource like money, buyers will be fearful of misusing it. So, we want to be aware of that in our response as well.
Third reason is a lack of differentiation. Buyers just don’t see a difference between you and other alternatives. When they don’t see a dime’s worth of difference, they’re not going to pay a dollar more for your solution. We’ve got to be aware of that. We’ve got to highlight the unique aspects of our solution.
Okay. So those are the three primary reasons why buyers object on price.
Now, let’s get to the actual technique on how we’re going to respond. The first thing we’re going to do is, we’re going to acknowledge their concern. The next thing we’re going to do is, we’re going to shift the conversation away from price, and we’re going to focus on money. Then, we’re going to prepare our response as a reversal of the objection. And then, finally, we’re going to give the buyer six ways that our solution will bring them more money.
Let’s start off with acknowledging the objection. That’s the first step. When the buyer says your price is too high, the next words out of our mouth have to be,” I understand….” Okay? What we’re doing here is, we’re letting the buyer know that we hear them, that we understand them, that we’re empathizing with them. The buyer then feels heard. They’re going to be more open to whatever we say next. The very first words out of your mouth, when the buyer objects on price, has to be, “I understand….” Not the actual dot dot dot. That’s an ellipsis. Okay (laughing? So make sure that you don’t say dot dot dot. Just say “I understand,” and then, you’re going to move into your response.
Let me demonstrate that for you. Let’s say you’re meeting with a buyer and the buyer says, “I’d love to work with you, but your price is too high.” “Mr. Customer, I understand that price is going to be one of the many variables that you consider when making this decision.” Okay? There it is. That’s all I’m doing is I’m letting the buyer know, “Hey, I understand.”
Next, we want to respond. And when we respond, this is where we change the conversation from price to money. So, let’s continue with that same example. “I’d love to work with you, but, your price is too high.” “Mr. Customer, I understand that price is going to be one of the many variables you consider when making this decision. But, the reason that you’re focusing on price is because you want to make sure that you save or make the most money in the long term. Is that right?” Now I’m changing the conversation from price to money. The reason I want to focus on money is because money is much bigger than price. And that’s at the heart of any price objection. They want to make sure that they’re just saving or making the most money. And our solution might cost a little bit more up front because of the price, but it’s going to deliver more long-term value.
So again, I’m saying to that buyer, “Mr. Buyer, I understand that price is one of the many variables you’re considering when you make this decision, but the reason you’re focused on price is because you want to make sure you save or make the most money. Is that right?” The buyer will agree to that. Now is when we reverse the objection. We say to that buyer, “Okay. Well, good. If money is your real concern, then that’s all the more reason to go with our solution. And here’s why I say that.”
Now we give them six reasons why our solution is going to give them more money. I’m going to give you six examples. These are generic, but you’ll get the point. So, from the very top. I’m just going to go through this, once again, just so you can get a sense of the rhythm.
The buyer says, “I’d love to work with you, but your price is too high.”
We respond by saying, “Mr. Customer. I understand that price is one of the many variables you’re considering when you make this decision, but the reason you’re focused on price is because you want to make sure you save or make the most money. Is that right?”
The buyer says, “Well, yeah. I want to make the most money.”
“Well, Mr. Buyer. If your real concern is to make more money, then that’s all the more reason to go with our solution. And here’s why I say that.
- Our solution is going to help you save on labor costs, which is going to help you make more money.
- The long-term maintenance on our piece of equipment is substantially lower than any of our competitors. That’s going to help you make more money.
- When you think about reducing waste, our equipment is going to help reduce your scrap rate, which is going to lead to more money.
- When you look at our warranty, our warranty is going to guarantee you that there will be no maintenance costs for the first three years of this equipment. That’s going to help you save more money.
- And not only that, with our certified installers, we’re going to ensure that there are no costly callbacks or do-overs, and that’s going to also lead to more money.
- And then, finally, because our equipment is going to continue to perform, it’s going to add to the quality of your solution for your customers, which is going to lead to long-term satisfied customers, which again, leads to more money.
So, Mr. Customer, if your real concern is money, wouldn’t you agree that our solution would be the best solution for you?”
Then, we’d let that sink in. Notice how we asked the question at the end? We want the buyer to think about it. This is something that you will have to practice. I would encourage you to think of your solution and come up with a list of at least six ways that your solution helps the customer make or save more money.
That is it. That is the holy grail of responding to price objections. Give it a shot. Try it out. Let me know how it works for you.
Make it a big day.