Handling the Price Objection

By Ann Barr

Every now and then you hear a statement or read words that really make you stop and think.

First:  Thank you to Patrick Martin at Base Wright-Moore in Indiana for allowing us to share this with you.

Patrick participated in our last online seminar. During the third week of the four-week seminar, everyone was asked to write their most effective response to a price objection.

Patrick’s response was unique because it accomplished three important objectives.

   (1.)  This response let the customer know Patrick was not going to be defensive and was not going to argue.

   (2.)   The answer to his response gives him information about the competition.

   (3.)   The statement and the question put Patrick in the position of being more like a consultant and not a sales person.  Even though we love to buy, we hate to be sold.

(It is important to know that Patrick has spent years developing solid relationships with his customers. They trust him.)

A Very Effective Answer

Whether you can use this or not depends on your particular situation.

Customer:  “I can get it at a lower price.”

Patrick:  “Well, our costs do change every time we receive new inventory.  We will have to keep an eye on that one.  Who has it at that price?”

See what happened? 

The statement “our costs do change every time we receive new inventory” gets the idea across that with another inventory shipment in the future, the cost may be more competitive.

Saying “we will have to keep an eye on that one” lets the customer know Patrick is looking out for him/her and not just trying to sell, sell, sell.

Then, the answer to the question “Who has it at that price?” lets him know what kind of pricing the competitors are offering. It is not surprising that Patrick is often the top sales person at his company.

More Responses to “Your Price is Too High”

 l  “If it weren’t for that, you would go ahead and order from us?” 

    l  “Is that the main thing holding you back right now?” 

    l   “Assuming we agreed on price, what else is important to you?” 

After asking the three questions above, it is critical that the sales person remains silent until the prospect answers the question.

Five Ways to Handle the Price Objection

If your competitor’s retail price is just a fraction above the price you pay for the same product, there is no way you can lower your price without giving away all of your profit. What do you do? 

   1. Tell the truth. Admit that you can’t be competitive on this particular product. The customer will respect you for being honest. 

   2. Offer a generic or a compatible product if you have one. It helps if you have a few testimonial letters from customers who are happy with the generic or compatible product you sell. 

   3. Find out what ELSE they buy. You can say for example: “Unfortunately our price on the 51645A is not competitive, but we have a GREAT price on the 92298A. Do you need one of those today?” 

   4. If they don’t need anything today, tell them you will create a file listing the items they buy on a regular basis and ask if you can mail, fax or e-mail monthly sale information. This keeps the door open for future opportunities with this customer.

   5. If all else fails, ask to be considered as a second or “back-up” source for this and other products in the event their current supplier is out of stock.  Take this one a little farther and suggest that the prospect input your information into the computer for a back-up source or write your name, company name and telephone number on the back of the business card or rolodex card of the vendor they are using now.

It is amazing how often number five works because it is a soft-sell approach and again puts you in the position of sounding more like a consultant than a sales person.  Most consumers respond well to this approach, more so than feeling pushed into buying something today.  I hear from sales reps every week telling me that offering to be a second source really works.  Prospects call back to order when their current vendor is out of stock.  From that point, it is up to the sales rep to keep in touch by telephone, direct mail, and with permission, fax and email.u

Ann Barr is a consultant and sales trainer who has written eight books on sales and marketing. You can sign up  for Ann's free Weekly Sales Tips  e-mailed newsletter at her web site www.sellingsupplies.com.