All salespeople, at one time or another, have had their price challenged. What do you do when that situation arises?
As much as everyone in sales would like to consider themselves “great closers,” in reality, many are weak when it comes to this important skill. They boast about never discounting their product, but when confronted on price, they fold faster than a cheap umbrella on a windy day.
Consider the following scenario you may have found yourself in:
You’re on the verge of closing a big deal. Doing so will put a nice, fat commission check in your hands and you’ll soon be receiving kudos from everyone in the company. Now comes the curve ball. You discover that the customer is looking to you for a price discount because they found another supplier willing to undercut your price.
Read more about Ways to Overcome Price Objections in a Pandemic.
While you are under pressure to get the sale, you are left with only two options. You can hold the line and not cut the price to keep your profit potential intact. Or, you can cut the price and be willing to take a lower margin for the sake of getting the order. Which do you choose?
Price Is a Reflection of the Salesperson’s Confidence
Although the tendency for many is to give a lower price, there is a better approach. By being prepared ahead of time, you can avoid caving in under the pressure of the moment. How do you prepare? Know why you can fill their need
In a situation like this, your self-assurance is critical. You need to have clarity of value. What do you bring to the table?
Be confident in what you say. More importantly, ensure that the customer is certain of the benefits they will receive by working with you. People will pay more for what helps them with their problems, and that brings them value. The cheapest price might be what everybody is looking for, but what good is a low price if it doesn’t deliver?
How to Respond to Price Objections
When the customer requests a discount, respond by asking them about what they expect to gain from buying your product/service. Your goal should be to get them to express the pain they will experience if it doesn’t help them accomplish what they want. Then, guess who can alleviate that pain and best fill that need? It’s you!
Focus on the outcomes you can deliver to the customer.
The worst thing any salesperson can do when a customer is looking for a price break is to give in. Unfortunately, because many cannot confidently communicate their price, they often cave. To overcome this problem, salespeople need to understand, in real terms, the buyer’s perspective of how they can benefit from the product/service.
Remember, we understand by listening.
Cheaper Is Not Always Better
For example, if I’m going to take a trip and my destination is 1,000 miles away, I have several options as to how I can get there. I could hitchhike, which would cost me virtually nothing, but wouldn’t guarantee when I’d arrive. I could drive my car, keeping my immediate costs to only the gasoline (assuming the car does not break down), but my travel time could take several days. Or, I could fly, which would cost the most, but would, undoubtedly, be the fastest.
Yyour goal in selling should be to help ensure the success of your customers. So you can see from this example that the cheapest approach is not reliable, nor would it save time. In addition, most people wouldn’t want to take several days to drive to and from the destination. Therefore, because of the time it will save, the best option is to fly.
Since time is of the essence with many customers, its value is worth the extra money. Keep that in mind, as cutting the price is clearly not the most beneficial or efficient.
Discounting Now Will Always Come Back to Bite You
Another common reason salespeople give in when challenged is because they believe the lie that by offering a discount on the initial order, they can make it up on the next one. However, the truth is that there is no way to ever regain the lost revenue. Once the customer has accepted a lower price, that amount becomes their expectation. Any other price is seen as an increase.
Read more about Why Price Cutting Isn’t a Viable Prospecting Strategy.
Maintaining pricing integrity is a challenge. It starts by being self-assured, and it extends not only to the service you deliver, but also to the expectations of the customer.
Don’t entertain their requests for a discount. Be confident in both your price and the product/service you offer. Ensure that your sales pipeline is full by spending adequate time developing it at all phases of your sales process. Consider how your product/service can help ensure the future success of your customers. Without confidence, you can say good-bye to your profits.
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Copyright 2021, Mark Hunter “The Sales Hunter” Sales Motivation Blog. Mark Hunter is the author of A Mind for Sales and High-Profit Prospecting: Powerful Strategies to Find the Best Leads and Drive Breakthrough Sales Results.