What are your tips for overcoming price objections from your prospects?

I always use the feel felt found method , I always say I can understand how you feel about this others felt the same way when they heard the price but when they used our product they found the value in it and the I go ahead with the benefits of the product again.

There are a lot of good responses here that I agree with, but I would like to add a few other thoughts:

- Get in early. If you are late to the buying process, it will be about price. You lost the greatest chance to differentiate - by getting in early.

- Talk to the right person. Often a sales person asks his manager for a discount on a deal he is working on, only to find out that he is not talking to the (often called) "Economic" decision maker.

- Ask questions early to set up the killer demo/presentation that is totally configured to their needs. The more a customer wants your product because they believe it is the right solution, the less price matters.

- Believe in your price. An often overlooked key trait in a sales person is their passion for what they offer - if YOU believe that your price is correct for what you offer in the market, it will be easier to negotiate.

First, we should never be surprised with a price objection. It's the customer's job to get the best price possible.

Sales people need to shift the conversation from price to Return On Investment, or any other business value based discussion. Focus on hard facts about the return the customer should expect from buying your solution. How much will it help increase revenue or profit, how much will it reduce cost, what new opportunities does it allow the customer to address--and what return do they get.

As long as we let price dominate the discussion, the only way to win is to have the lowest price.

I've sat in meetings where clients have an objection to a change control where the cost of the change control was not what they expected to pay. This is usually resolved when the details involved in doing the change they requested are made clear to them. In these scenarios, there is usually a disconnect between the client having one idea of how the change will be made/implemented and the reality of the situation. This occurs in my industry (I.T.) a lot because the client usually sees, not even the whole finished product, but just the front-end of a finished product with little awareness of what goes on to get that product to production. If you have someone (salesperson, PM, whoever...) who can effectively explain the intangibles of what a client is getting for their money to the client, that person is worth their weight in paid invoices.

Uncover the real objections and understand your perceived value. Price is the most common excuse given by prospects. However, in 90% of the cases in which our clients were told they lost on price, our win/loss analysis revealed that price was not even the main factor in the decision.

There are always many other factors that influence prospects buying decisions. Until you know how you are truly 'perceived' by your customers and prospects, you will continue to get the price objection and lose opportunities.

Lauren, the sales person should approach the price objection as an initial sign of interest on the part of the prospect, and an entry point in the negotiation to a closed sale.

My standard response to the price objection is “based on what”? At this early stage of the negotiation you want to be able to determine several things:

1. Is this a just a tactic to negotiate a better price, or eliminate your proposed offer from further consideration?
2. Has the prospect done their homework and completed a thorough evaluation and benchmark comparisons of the competing offers?
3. What factors has the prospect considered that are important to the final decision to determine that the price is too high?
4. What does the price need to be in order for the prospect to make a purchase decision?

In the early stages of the negotiation, what the prospect is really saying is “tell me more”. So, the sales person should shift the price objection to a broader financial discussion that takes into account internal rate of return, ROI, product life-cycle, etc.

Moving away from price to broader financial considerations will also enable the sales person to clearly demonstrate their differentiated value, and arm the prospect with additional information and reasons to buy from you.

Answering questions after the people I admire have chimed in is challenging, especially with so many excellent answers. There are many situations with numerous variations. Here is one that I have learned.

Very often, when the buyer argues price, what they’re really telling you is, “I want what you have, and I need your help to justify this purchase.”

Early in the sale, one of my objectives is to learn the customer's primary motivation for a purchase and what their dream deal looks like. Then I build value on that "one thing" and stick to it.

When price becomes an objection, I am not afraid to remove an option or feature, scale down the offering, or suggest something completely different.

I cannot count the amount of times customers have responded, "I need or want that." When a customer says those words, the work is done.

In the end, the lowest price rarely wins and the buyer's perception of the best value is the deciding factor. Learning what the buyer's dream purchase looks like and building a proposal and buyer experience that matches that and sticking to that "one thing" is the surest way to overcome price.

Why do people pay to 'text' SMS when IM or e-mail is free?

Why do the cheapest Theatre Seats often sell last or even not sell at all?
(Why are the Hollywood Bowl $1 seats often empty?)

When buying Movie Theatre Tickets:
If I told you the Highest price paid was $65
or The lowest Price paid was $10
How much would you be prepared to pay?

To "handle" price objections,
it helps to understand the Psychology of "Pricing".

I would say being proactive about detailing the value of the product and making the price the last word you say works in most cases.
Proactivity also implies anticipating possible objections and being prepared for them.
The bottom line is you didn't come up with your price out of the blue! You had good reasons. Make sure to clearly explain them to your prospects and they will be sold instantly. Good luck!

Personally Lauren I do not share pricing until I have a thorough knowledge of the business probelm they want to resolve. I need to help them uncover the current costs of what is happening now. Once I know this I can then formulate a program to help and then this is when I share cost. It is always this is what you are spending and this is what you are getting in return for what you are spending verus this is what you will spend with me and this is what you get in return. Of course, I am keeping it simple for the sake of this site. To me when you can make these references price objections rarely arise.

I don't deal with price objections at all!

I make sure my offer is reasonable to everyone, myself included, as well as the prospect. I am lucky to be in a position where if the prospect wants to take a cheeper offer, I have other work to do. I tell the prospect that "if someone quotes significantly lower, they either don't know what the project will take or they are hiding something from you." But then when you have 42 years of experience and happy clients as references....you can do this.

No this kind of response must be coupled with a good offer to the customer. Something that addresses their needs and has a probability of success. I also NEVER quote fixed price engagements. My statement is "the time it takes me is directly proportional to the effort you and your staff make and the work you want to pile on me. The more YOU do, the lower your cost."

Hi Lauren,

I prefer doing Matrix when situation becomes random and unpredictable, Objection is part of the Sales Process but on a different quadrant -- as you go along with time. Create this trend and still reinforce your relationship with the buyer and his/her peers.

In my opinion people decide to buy on three core factors, price, relationship and differentiation. By focusing on enhancing the later two you will steer the conversation away from price.
There are also three main reasons why people want to negotiate, because there are signs you will, because they don't see the value of your opportunity as outweighing the cost and because they genuinely don't have enough capital. Normally it will be one of the first two.
By avoiding signals that you will negotiate and by raising the value of your offering by discussing the results for them, people will stop talking about price. Best to avoid it than overcome it..

Any idiot can say, "It's too expensive!" And any idiot can cut the price as the sole response.

It takes a real sales professional to identify the value and educate the prospect about that value, in the process making the offering look like a real deal.

Keep in mind that most professional buyers are taught to resist price two or three times before agreeing to the price. A professional seller must have at least two or three counters to this strategy to stay in the game.

How many tactics do you have?

Any idiot can say, "It's too expensive!" And any idiot can cut the price as the sole response.

It takes a real sales professional to identify the value and educate the prospect about that value, in the process making the offering look like a real deal.

Keep in mind that most professional buyers are taught to resist price two or three times before agreeing to the price. A professional seller must have at least two or three counters to this strategy to stay in the game.

How many tactics do you have?

Hi,

I guess 1) try to find the reasons for the objections; 2) consider the clients' needs and wants to develop some strategies to satisfy their needs. 3) Develop different programs to attract the clients.....I read an articles about pricing and how to increase prices....hope it helpful.

edustarzone.com/PricingStrategy.html