Handling Price Objections
You will get price objections. Until you are able to demonstrate the difference between your product and that of your competitors the customer will have little else to go on. It will be your job to handle those price objections and you should do this by demonstrating the value of your product or service.
For instance the customer may say “Your wheel bearings are too much money. I don’t want to spend that much on wheel bearings.”
In this case as with all price objections do not make any apologies for your price. You simply need to minimise the problem and maximise the benefits of buying your more expensive wheel bearings.
“You are absolutely right Mr Customer” ( Don’t argue with him, agree if your can.) “These wheel bearings are a considerable investment, but let’s have a look what you are getting for your money. These wheel bearings are made of titanium and they are self lubricating so they will last two lifetimes. Isn’t it worth spending just a little bit more for this incredible benefit?”
In that way the customer will feel the value is worth paying more for your product than your competitors.
“There are four ways to think of this;”, as one of my sales mentors told me many years ago. “Add, Take Away, Multiply or Divide.”
Add all the benefits that your customer will be getting when he purchases your higher price product.
We have already covered this one with the wheel bearing example above. Don’t forget to include the last sentence “Isn’t it worth spending just a little bit more for all these added benefits?”
Take Away what the customer will be missing if he doesn’t go ahead with the purchase right now.
“If you don’t go ahead with your website now think of all the sales opportunities you will be missing over the coming year.”
Multiply the savings the customer will make over the period of time he is using your product or service.
“By installing our printers you will be saving 10c per page on your current printing costs. You have at least 3,000 pages printed per day in this office. At 10c per page that works out to a saving of $30.00 per day, $150.00 per week or a massive $600.00 per month. Isn’t it worth spending just a little bit more for a saving of $600.00 per month Mr Customer?”
Divide the extra cost of your product or service by some appropriate figure.
Let us imagine that you would like your customer to rent your photocopying machine instead of your competitors machine that he has used for 3 years at a rental of four hundred dollars per month. The contract is running out and your customer is expecting just to renew with your competitors. Your quote is more expensive at five hundred dollars per month and the customer is not happy.
“Five hundred dollars per month!” he says. “I don’t want to spend five hundred rand per month on a photocopier.”
The inexperienced salesman would be tempted to try and justify the five hundred dollars but this would be a mistake. The customer is already expecting to pay four hundred dollars so you only have to justify the difference, one hundred dollars.
Even then you should not leave the one hundred dollars difference as it is. Divide it by some appropriate figure to show the relative value your customer would be getting.
In reply you might say “Well Mr. Customer that is only one hundred dollars per month more than you are paying at the moment. One hundred dollars per month is just three dollars per day. Isn’t it worth spending just three dollars per day for all the added benefits you will get from our photocopying machine?”
The customer may not want to pay five hundred dollars per month but three dollars a day seems like great value.
It doesn’t have to be days of the week that you use to demonstrate the relative value of your product or service.
“Five thousand dollars per month may seem like a lot to spend on air conditioning Mr. Customer, but with two hundred and fifty people in the factory that is less than one dollar per day per factory worker. Isn’t it worth paying less than one dollar per day per factory worker to have a clean, fume free, and cool environment for them to work in?”
[bctt tweet=”Closing the sale is as easy as Add, Subtract, Multiply and Divide.” username=”richardmulvey”]
This is an important technique to demonstrate the value of your products. Consider the following example:
I went out to help my daughter buy a car some time ago. She had saved enough money and she asked me to help with the purchase because Dad knew a little about cars. Dad also had to contribute towards the car in the end as well but that is another story.
Anyway… At the end of the sale the salesman approached me and tried to sell me some extra insurance for the vehicle but I told him that we are already over budget and I don’t think we are going to spend any more money on extra insurance. He replied as follows:
“You are quite right Richard, it does sound like a lot of money but the investment for this insurance only works out to the price of one can of Coke a day. Isn’t it worth spending the price of just one can of Coke a day for all the peace of mind this insurance will give you.”
We didn’t buy the insurance, because I don’t drink Coke. But it was a very clever way to demonstrate the comparative value of the product he was selling.