On this episode, Paul discloses the secret to overcoming price objections.
Deep down, you know what is missing when managing price objections: _____.
The biggest killer of confidence is lack of preparation.
“Nothing frees you from the pressure to discount like working a deal you don’t really need.”
Do you have an immediate response to price objections?
Price is only an issue in the absence of value.
Buyers don’t deserve your discount, they deserve your _____.
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What is the secret ingredient to overcoming price objections?
(Transcribed from podcast)
On today’s episode, we’re going to talk about that secret ingredient—the secret ingredient you need to overcome price objections. Now, I can go through technique, I can show you exactly what to say, I can show you which questions to ask, but there is still one ingredient that you are going to need to be successful as you overcome price objections.
Now, before we get into that actual secret ingredient, let’s talk about our sponsors. Andrea, over at The Creative Impostor Studios does an absolute wonderful job. Check it out. I mean, the podcast is now downloaded in over 65 countries. It continues to grow. A lot of the credit goes to Andrea and her team. They’re here to help you. So please reach out to her. If you want to start a podcast, if you’ve thought of starting a podcast, even if you’ve got some questions and you think you’re ready to get started, hey, reach out to her. She can help you along the way.
Also pick up your latest edition of Value-Added Selling. You know, in Value-Added Selling we have a whole chapter dedicated to price objections—what to say, how to say it—and that can help you as you manage the conversation. But there’s still that one missing ingredient which we’re going to talk about today. But if you need some help on the technique side of it, pick up your copy of Value-Added Selling. It’s available wherever you get your books, Amazon, Chapters, Barnes & Noble. It’s available throughout the world: Japan, France, Germany, UK, China, you name it. Pick up your copy of Value-Added Selling today.
All right, let’s get back to that question. What is the secret ingredient to overcoming price objections? Now, I’m guessing you might already know. I’m guessing deep down somewhere you know what is missing when you are managing price objections. One word—confidence.
Let that rest for just a minute. Confidence is what is missing. What is destroying our confidence in managing price objections? I’ve seen this in salespeople throughout my career. Number one, the biggest killer of confidence is not being prepared. I think about it. If we’re not prepared and we get caught off guard with a price objection, of course we’re going to feel less confident in how we can respond to it. So if you’re caught off guard and you don’t have a prepared response or know what to do, you’re not going to be as confident.
Now there’s another factor leading to this confidence killer and it is fear—fear of not getting the business. And I don’t get it. Why is there so much fear about losing an order? It’s not going to be the end of the world. If anything, the past year and a half throughout this pandemic has taught us as salespeople we’ve got a whole heck of a lot more to fear than just losing a piece of business because of price.
I remember, early on in my sales career, I was in a terrible sales slump and I was out with my sales manager and I had a lot riding on this deal. We were going to present an idea to a new customer, and man, I was fearful of not getting this order because I was in a slump. I knew that if I didn’t get this, it was like, “Oh man, what am I going to do?” He could sense my anxiety, so before we went in there and actually presented, he asked me a few questions.
He said, “Paul, you’re not screwed if you don’t get this deal because your track record shows that you’re a good salesperson. You’re just going through a little rough patch.” He goes, “Here’s what you need to know. If you go in there and you blow this sale, you’re still going to go home. You still got your wife there. She loves you. You still got your friends that want to hang out with you on the weekend. You still have your house. You still have this. You still have that.” He said, “Paul, this is not the end of the world. Don’t worry about it. Who cares?”
And I thought to myself, when he was saying all these things, I’m like, ‘Gee, he is really making sense. I really don’t need this deal. If I don’t get this deal, it’s not the end of the world. I’m going to find more opportunity.’ What are we fearing as salespeople? Remember that, the fear that we feel going in there thinking ‘Man, we have to have this deal,’ it’s unwarranted. There’s too much fear. There are always more opportunities that you can find.
So let’s get into how to build that confidence. The first thing you want to do to build that confidence is fill your pipeline. Nothing frees you from the pressure to discount like working a deal that you don’t really need. Think about how much more confidence you go in there knowing that ‘Hey, if this deal doesn’t work out, I got three other deals lined up to help me.’ Confidence is key when you overcome those objections. So, if you want to peak your confidence, fill your pipeline. Too many salespeople have a pipeline that is reliant on one or two or three opportunities. What if you had ten opportunities instead of three, knowing when you go into that third opportunity that if you don’t get it, ‘Hey, I still got seven more waiting in the wing that I can push forward.’ The buyer will sense your confidence when you walk in there to a deal that you really don’t need.
I remember working with a group of salespeople just a couple of years ago. They’re selling, let’s call it half-a-million/million dollar solutions. And when they’re selling their solutions, it’s common for them to have a shortage every now and then where, you know, there’s only a certain amount available to certain companies in certain markets and all that good stuff. And one salesperson gave a great tip to his fellow salespeople. He said, “If I’m working a deal and I know we’re running through a shortage, I will purposely try to find other customers or prospects that are interested in this solution. Because I know if I go in to negotiate with a customer and I’ve got three other customers interested in the solution, price becomes less of an issue.”
Think about this if you were a realtor. You’re selling someone’s home and you’ve got one prospective buyer who’s extremely interested. They basically told you, “Hey, I’m going to make an offer. I’m going to get things going.” What you need to do is not rely on that deal to happen. Instead, find two other people that are interested in buying the home. Don’t just stop looking now that you have one person that is extremely interested. No. Find two more people that are interested in buying. The key is again, if you want to peak your confidence, fill your pipeline. Nothing frees you from the pressure to discount like working a deal you don’t really need.
Next thing you want to do, practice your immediate response to objections. You’re going to hear price objections all the time. There is no excuse for not being prepared. When a customer says, “Your price is too high,” it should trigger a response in your mind. Work on that first immediate response. Here’s what I’m suggesting. Ask them a question. When your buyer says your price is too high, turn around, regain control of the conversation, and ask them, “When you say our price is too high, what do you mean? Who are you comparing us to?”
That’s you regaining control of the conversation, and then wait to see what the buyer will say. They might say, “Well, I’m comparing your solution to someone else’s down the road and they’re much cheaper.” Or they might come back and say, “Well, I’m just comparing it to our budget—what we expected to spend.” What you’re trying to do is regain control of the conversation and then get more information.
Work on that first response whatever the buyer tells you. When they say your price is too high, “Could you be more specific?” “Please elaborate on that.” “What do you mean?” We call that a clarifying question. That’s going to give you more control. The more control you have, the more confidence.
Let’s get to the final suggestion. Sometimes salespeople tell me, “Well, the buyer deserves a discount. They deserve a discount because they’re taking a chance on our solution.” “They’re switching providers.” “They’re a good customer. They deserve a discount.” Buyers don’t deserve a discount. They deserve your value, clear and simple. Price only becomes an issue in the absence of value. And so when a buyer tells you, “Hey, can we get a discount,” “Can we and get the loyalty discount?” “Can we get this. Can we and get that?”
“No. The answer’s no. You can get more value if that’s what you really want. And here’s some of the ways that we can do that.” Buyers don’t deserve your discounts they deserve your value. So when you do get that request from a buyer, telling you to discount the price, respond to them and say, “You know what? It sounds like there’s a question of what you’re really getting for the price that you’re paying. Let’s take a look at what you’re really getting. Let’s go through and review the value of our solution and how it’s going to impact your business.”
Once you can reframe the conversation around your value, then you can open up the doors to other ways you can add value. So when you get done presenting your value, just ask the buyer, “Hey, what’s missing from this solution? What else can we provide you? How else can we impact your business?” Again, you’re regaining control of the conversation. Now, that’s going to appear more confident to the buyer; it’s absolutely going to be more confident, but you also need to gain confidence by truly understanding the value that you do bring.
Oftentimes in my training seminars, we’ll go through an exercise called a value audit. And in this value audit, salespeople go out and they list all of their value-added extras—what they provide their customers. Now we don’t share this list with customers. Instead, part of the reason we do this is to help salespeople understand all the value that they truly do bring. It’s amazing how often salespeople will tell me, “You know, gee, I didn’t know we did all these things.” I’m like, “How confident do you feel in presenting your solution now?” Pretty darn confident. That’s the value of a value audit.
Alright. So those are the three tips. You are not doomed to repeat your discounting past. There is hope. There’s a better way to do it and it begins with building confidence. To build that confidence, fill your pipeline. To build that confidence, have a clarifying question ready to go when the buyer does object on price. And finally, to build that confidence once again, review all of your value and that’s going to help build that confidence in your overall solution.
Make it a big day.