The subject of pricing is a very dicey one for many businesses especially startups and SMEs still trying to get their footing in the market. Many have had to learn the concept of negotiation and handling price objections the hard way.
This topic of price handling is of importance because of its far-reaching effects on the health and life of a business.
Now because the primary aim of every business is to satisfy the needs of their customers, some do this to their own detriment by not negotiating a win-win situation for both themselves and their customers. Leading to a collapse of the business over time.
This is why every entrepreneur and business owner must learn these simple tricks for handling price objections from customers.
Simple Tricks in Handling Price Objections
Before we delve into the discourse of handling price objections properly, it is important to take note of this simple principle while in a sales conversation to prevent getting into a price objection.
“Never introduce price too early in a sales conversation”
This is a very simple but very profound principle. In a sales conversation, before discussing price, make sure you’ve built value for your product/service in the eyes of the prospect so that when you eventually start talking about price, they will understand the value of what they are paying.
Having stated this, we can now discuss in detail how to handle a price objection in a situation when one arises.
1. Always Build on the Value of Your Product/Service
As earlier stated, it is pertinent to build on the value of your solution before introducing the price. But in a situation where there’s an early request for the price by the client before you get to do this, a very good way to handle this is to fall back to talking about the value.
Prospect: So how much is it?
You: I’m sure the price is of concern to you, I’m sure so also is the quality, therefore I’ll just like to highlight a little more on the quality of the service so you can better understand what we’re offering.
Prospect: So how much is it?
You: It all depends on what you are looking for, so if you don’t mind I’ll like to highlight a little bit more about what we offer, so we make sure we have the best fit for what you are looking for.
2. Share Case Studies of Satisfied Clients
Another great way to handle price objection is by presenting case studies of clients to your prospects.
People like to see that they’re not just going into uncharted waters, thus this will be a great way to douse their doubts.
Prospect: Sorry this price won’t work for me, it’s a bit outrageous.
You: I acknowledge that our solution is a bit expensive, but looking beyond the price, let us focus on the type of investment you’ll be making once you make this purchase.
This concern you just raised was the exact same a present client of ours raised when I revealed the price of our product to them during our meeting. Initially, he was hesitant, but he finally gave it a try and now he’s one of our biggest ambassadors, you can see his testimonial of how much impact our solution has made for them on our website.
3. Don’t Go Into Justification Mode, Answer Smartly
For most individuals, the first thing that comes to mind when a prospect objects to price is to quickly jump into defense mode, and then an unending price haggle. In any case, this will end up an unproductive battle, and the best way to get around this whenever a prospect or customer raises a price objection is to take a brief pause and then answer based on the problem they want to be solved.
Prospect: This price is too much for me.
You: I appreciate your honesty. But aside from the price, do you think our product will help get the job done?
You: Thanks for the honest feedback. Putting the price aside, here’s how it will be of benefit to you both now and in the long term. (Highlight the benefits of the products to them, especially how they help them solve their problem and reduce cost).
If the prospect responds with a “No” to the initial question “do you think our product will help get the job done?” then thank them for their time and focus on another deal.
4. Offer a free trial
If you are sure your solution meets your customer’s needs, which it should if you are trying to sell to them, you can offer them a free trial for a certain number of days if you will not run into a loss, so they can see the impact of your solution.
Prospect: This is beyond our current budget.
You: Is price the only thing that’s keeping you from proceeding with the solution? Are there any other concerns that are stopping you? Would you like to try the product for free to see how it can help in resolving your current issue?
(If the prospect agrees, then go ahead to offer the free trial. If not, then invest your time and efforts on some other deal as the prospect might genuinely not have the budget for your product.)
The pricing of every business product/service plays a huge role in the business’s survival and growth. Judging from the impact price has on every business, it is important as an entrepreneur to learn how to handle price objections more professionally and turn objections into sales for your business.
Depending on the situation surrounding the sales conversation, try these different tactics in handling pricing with your prospects, and try to change their perspectives from seeing just the price, but also seeing the value and the importance for it to be a win-win situation for both parties.