Any price is too high

by Rick Phillips

It seems that everywhere I travel salespeople are tormented by the same objection. They ask me, “What do I do when the customer says my price is too high?” My response is always the same, “When the customer tells you that your price is too high, the customer is right.” 

The price objection is traditionally the quickest way for a prospect to get rid of any salesperson and you will hear it almost every time you haven’t discovered any good reason for them to buy. So, they are right. Chances are, if you are hearing the price objection, you have to understand that you don’t have a pricing problem as much as you have a value problem.

Until you have established what your product or service will mean to the prospect – its value – any price is too high.

Price is seldom the real issue
Buying studies have been telling us for many years that price is seldom the prime issue in purchasing decisions. Most of the research available today indicates that price ranks as only the fifth or sixth most important buying consideration. It just seems to be the most important in the minds of a lot of salespeople.

An executive with a major retailing chain recently told me,  “We’ve found that our shoppers come in talking about price and leave buying value.” We know he is right. To prove it, all you have to do is stop by any municipal parking lot and try to count the number of Yugos you can find. (If you can even remember what they looked like.)

Value is the issue. Value is the combination of prospect need,  price, perceived quality and anticipated service. In that equation, need is the key. It's the difference between dropping by the sporting goods store to shop for a raft for weekend outings and looking for a raft when the ship is going down 50 miles off shore.

Eliminating the price objection
For many years we have trained sales people not to “handle” or “overcome” objections but to develop strategies that “eliminate” or “preempt” them from ever occurring in the first place. The key is to anticipate the objections which are most common and then eliminate them by asking the right questions up front. Here are some ideas:

Selling on price is a losing position
The person with the lowest price will win in some selling situations. The problem is they are always the most vulnerable. Someone can always come along with a cheaper price. The other thing that makes this strategy so weak is that when price is cut so is the margin to provide service. Eventually, service and quality will become an issue, which cannot be answered at the lower price.

Selling consequences
Our prospects don’t but what we sell they buy the results of what we sell. Charles Revson, of Revlon fame, said, “We do not sell cosmetics, we sell hope.” Concentrate on the results or the consequences of the buyer having your product or service. How successful do you think Revson would have been if he had concentrated his advertising on telling women about the chemical make-up of his lipstick. Revlon’s advertising talked about how beautiful the woman would be if she used their product. Revson sold the end result or the consequences of her using the product.

You need to concentrate on the consequences of the prospect owing and using our products. (By the way, you discover the important consequences by listening to the prospect, not by assuming which ones might be most important.)

Value and consequences have a price tag
The real sales professional will quantify value long before price is ever mentioned. You must discover from the prospect what the consequences are worth. If the prospect needs your product or service, there must be some dollar value to solving their problem. By using a logical probing process, the prospect will usually acknowledge the cost of the problems you are going to solve.

Sell to individuals, not companies
Understand that companies don’t buy anything. People who happen to work for companies do the buying. This is a lot more serious than it may sound. Imagine the prospect sitting across the desk thinking, “Yeah, but what’s in it for me?” Everyone has his or her individual buying motivation. Once you understand and can demonstrate how your product or service can positively effect the buyer personally or professionally, you are in the strongest possible position.

Buying is always an emotional process
The prospect’s buying decision is always based on his or her perception of value. Even the most jaded purchasing agent buys on emotion. It’s true. The most brutal purchasing agent in your community has an ego that is probably emotionally attached to his or her ability to negotiate the best possible deal for the lowest number of dollars. As a selling professional, you have to recognize this fact and let them have the emotional satisfaction of getting a great deal. Anticipate their needs and provide them with a deal on value instead of straight price.

Sell value or fight price objections
In the end, price has to be justified in the prospect’s mind, but as a selling professional, it is your job to give them the ammunition to do it. You can be prepared and do the job in advance or you can answer price objections for the rest of your life.

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