B2B Sales: Overcoming Price Objections
The #1 deal killer in B2B sales is "Your price is too high!" However, one followup question can help save your deal.
You are in the late stages of the B2B sales process. The prospect says, “We really like your product, but the price is quite a bit more than we were expecting. We are going to circle back with our team internally and we will let you know what we decide.”
And as we know, there won’t be any meeting. Your prospect is going to continue searching for an alternative and lower-priced solution.
Your sale is dead unless you can somehow turn this price objection around. But how?
One simple question can minimize the relative significance of price and shift the prospect’s focus back toward value. Or more simply stated, we are going to take the ICE out of PRICE.
Posted March 12, 2014 / By Chris Hickey
Tags:price objections, b2b sales training, growing b2b sales, b2b sales coaching, b2b sales management training, sales management coaching, B2B sales consulting, improving sales force effectiveness, sales leadership
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Sales Rep Question:
"Mr Customer...is it the PRICE that you are concerned about...or is the COST more important?"
Typical Customer Response:
"Well, what's the difference?"
PRICE = The initial money that you pay in exchange for a product or service.
COST = The lifetime cost of ownership of a product or service
Here is a real world example of price versus cost:
A client of mine established a line of credit with the bank to finance inventory for their business.
The PRICE of this line of credit was a low interest rate and minimal closing costs. On the surface, the PRICE seemed like a good business decision.
Less than a year later, the company’s cash flow got tight and the bank called the note. Even though they had never been late on a payment to the bank, the loan was called due to inadequate reserves. In banking jargon, this is called a “technical default”.
They were given 7 days to repay the loan in full. Unfortunately, the business was unable to pay off the loan as required by their lending agreement, and the bank forced the business into bankruptcy in order to recover their loan.
The business was closed. The owners lost the business including all of the money that they had put into it. Since they personally guaranteed the debt, they also lost their homes and many of their personal assets.
The COST of this line of credit was their business, their investment, and their homes.
Too often, we focus too much on price and don’t pay enough attention to cost.
After experiencing the hardships of COST both personally and professionally, I made a decision years ago that I would help my clients by focusing LESS on price and MORE on cost.
Since price is a one-time thing, and cost is a lifetime thing, we need to break down the COST to your company if you decide to go with a cheaper and inferior product. If the cost outweighs the price savings, then your decision is obvious. Does that make sense?
Not only will this redirect your prospects focus, but their feedback will let you know whether they view your product as a value or a commodity. If a commodity, then we need to circle back to product differentiation and proving value.
The bottom line is that a sale is made on every sales call. Either you sell them that your product or service is valuable enough to exchange for the money you are charging…OR they sell you that it’s not.
The secret is walking away with money more often than you walk away with an education.