Handling The Price Objection

It seems that no matter what product or service is being sold, if you ask a salesperson what objections is heard most frequently in the field, very often, the answer is “Price.” Why? I suggest it’s because people know about dollars and cents, but do not know the benefit of the product. That is why we need to sell the benefits before getting to the price.

People know price
Why do retailers run “loss leaders” or use the “bait-and-switch” tactics? Price grabs attention. Large ads scream, “50% Off List Price,” “Buy at Our Cost,” etc. It makes people very sensitive to price. That’s why the term “list price” and “list” should be removed from your vocabulary. Nothing ever costs “list” price. It should be “your price,” or “industrial net price”, or “bulk user price.” Words have economic value. No one ever wants to pay “list price.”

If you are always running into the price objection, you are probably selling a commodity and will probably not make much money for your efforts. Selling a commodity requires no creativity. It’s a fact in the selling business that the more creative you are, the more money you will make. If you get out of commodity selling, your profits and income should go up.

The commodity market
Airline tickets and gasoline are two examples of commodities. Even so, in these examples, price is not the primary reason why people by what they do. Think about an airline ticket. You want to go from Point A to Point B on a specific day at a particular time, and you want your route to be as direct as possible. Those are your priorities. You might be able to buy a cheaper ticket, but it may not get you to Point B at all, or it may not get you there on the day or time you want, or it may require two or three stops along the way. Price is probably third or fourth on your priority list.

During a recent business trip to Florida, I ran across a gas station selling regular gasoline for $1.59 per gallon. The station right across the street was selling it at $1.17 per gallon. When the high-priced station’s customers were asked why they were buying gas at this particular location, the replies were interesting. Most of the people didn’t realize that they were paying a higher price. Some of them stated it was convenient because it was on the right side of the street, or that they were in a hurry. A Canadian tourist said that it seemed pretty cheap compared with the price of gas back home.

Here again, even on a commodity like gasoline, You can do the math to figure our how much more profit this station was pocketing over its competitors.

Overcoming the objection
Sell the total cost, not the price. Say something like “I can appreciate your concern about the price, but let me explain that price is only part of the cost,” or “… the total cost of this item will reduce your overall costs,” or “… it only costs you more the day you buy it. From then on, you will save and save.” Talk about the “installed cost.” Discuss the “product life cost” over its lifetime of use.

Be prepared to prove and discuss your quality and service along with price. Point out that if any one of these items – price, quality and service – goes down, so do the other two. I saw a sign one time that said “Quality, Service, Price. You can have two out of three! Which one don’t you want?” Break the price down to the smallest amount. A $10,000 item over five years of use costs less than eight dollars per day, or one dollar per hour of a business day. It works out to even less for a six-day or seven-day week. This is how car dealers sell leasing.

Here are a couple answers to price objection that have to be handled carefully – you must perfectly practice them. Someone says “Your price is too high.” Your answer could be “That’s exactly why you should buy from us” or “Compared to what?” Those are really the issues, but be careful when using this approach with a customer or prospect. Try using a little humor.

Here’s another thought. If you are always shopping for the lowest prices yourself, you probably find it difficult to overcome the price objection, and may therefore find it very hard to be in the selling profession. Why is it most salespeople are an easy sell, especially those sellers that are good at presenting the benefits? Who in their right mind buys the cheap stuff? Not most people. If the salesperson sells benefits and justifies the price, no one will want to buy an inferior item.

How many of you are wearing the cheapest clothes that you could buy and are driving the cheapest car you could get your hands on? Take any item like that, and then sit down and make a list of priorities that you consider before making a purchase and see where price falls into that list. Price is always bigger in the mind of the seller than it is in the mind of the buyer. Buyers want quality, service and solutions to their problems, not cheap prices or cheap products.

There you have it – some answers to the price objection. The next time it comes up, we hope you’re ready for it and conquer it. Then both you and your customer will come out winners.

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