How To Overcome Your Clients' Price Objections

I got an interesting phone call the other day from a producer friend of mine, asking me how my company overcomes customer price objections. I know this is not an isolated instance; we've all run up against this one time or another. Rather than back down immediately and run the risk of blowing your profit margin, I suggest you try my tried and proven way of finding out why a customer believes your price may be too high:

Ask them!

Yep, that's it. Simple, huh? And you should use whatever tactics you feel comfortable with in order to discover the reason behind the customers' objection. Because once the customer has provided you with this information, you will be able to address the issue both intelligently and professionally.

I know you're thinking this sounds too darn easy, but follow along with me for a couple of minutes, okay?

To begin: there are several factors that may make the customer feel your price is too high when, in actuality, it really isn't! Perhaps they have only have, say, $5000 dollars in their budget, but want to purchase a service from you that normally costs $7500. This type of price objection is fairly easy to handle. Your price isn't too high...but rather, the customer just doesn't have the money required for the sale. At this point, it's up to you --or your salesperson --to find a way to make the sale possible for the customer.

You might want to suggest financing the item, for instance. Or set up a payment schedule, say three payments of $2500 each. Or you may want to point out a similar (but less expensive production) that the customer is able to afford. Perhaps you'll have to explain to the customer that his or her budget is set unrealistically low for those particular needs. If so, do it gently -- but do it.

But -- what if another customer complains that your competition charges a thousand dollars less for a similar product or service? Well, this type of customer conflict often occurs when you or your salesperson has named the price on an item without presenting a full picture of the very special features and benefits that your product or service offers. By not giving them all the information on your product, you're giving the customer a legitimate reason to dismiss the product, and use an unfair comparison to your competitor as well!

Why is this comparison unfair? Easy. You've not given yourself the chance the point out the differences between products. You have not explained, for instance, that while your item may be priced slightly higher, it will better meet the specific needs of the customer. You need to be well-prepared for this type of confrontation; and remember to stress that, in the long run, your service or product will cost the customer less because of added values, such as special packaging, a technically better product, more capable personnel, extra coverage, free copies, or free shipping.

You must always justify why your price is different than those of the competition. When addressing this difference, you should concentrate solely on the conflicting amount --and NOT on the total price of the item or service.

Now, you should always move on quickly with your product or service presentation, as a pause in the conversation leaves the issue open to the customer, which will allow them time to object. And once you've neared the end of the presentation, you should come straight to the point --which is to ask for the order. Remember how it starts: "Mr. Prospective Client, we really want your business."

And remember --after they've signed the contract or given you that first check -- don't play a big shot. Don't pretend you're doing them a favor. Thank them for their business! After all, your clients are the very reason you GET to be in business -- aren't they? Steve Yankee