Negotiating with a customer over a price quote can be difficult. Your primary goal is to make money, while your customer's goal is to save money.
Most customers assume your first offer is not your best and will automatically object without analysing the details of your offer.
How you handle the objection can make the difference in closing the deal or losing it. Here are some suggestions how to successfully counteract a price objection.
What not to do
Don't get defensive. This is sure to turn your customer away and head straight for your competitor.
Don't immediately give in and lower the price. This will make the customer think you agree that the product is overpriced.
Know your product
Know your product well enough to be able to answer even very technical questions.
Know how it's made, where the components come from and how long the product has been available. Take a tour of the manufacturing facility if possible.
Explain the value of your product – show how it can make money or how it can save money.
Be passionate about your product. The customer should see that you believe your product is truly the best there is and ensure you know more about your product than your customer.
If you know your price is higher than your competitor, acknowledge it up front before the customer has a chance to object.
Emphasise something your company does better than your competitor – for example, sales support, features of the product or warranty. Create a comparison chart and have it ready to display.
If the customer still claims your competitor is offering a lower price, make sure they are really comparing apples to apples. If applicable, show where you offer more features or services in your quote.
Pause, then redirect
Don't respond immediately. If the customer is using the objection just as a tactic and is not truly objecting to the price, they may restart the conversation before you do.
Try to engage the customer in a deeper conversation. Price may not be the real issue. Confirm with the customer that if price were not a factor, this is the product they would want to buy.
Share reputable customer testimonials. Find success stories within your company's history and share them with your customer, especially if the applications are similar to what you are proposing.
Offer extended payment plans. If the customer is near the end of the fiscal year and does not have money to purchase your product right away, offer a delayed payment plan.
Let the customer know your company accepts mobile payments (if you do). This can save time and money, especially if they have a monthly payment. Offer a discount if the customer will pay in full.
If the customer continues to object to your offer, perhaps it's best to walk away. The customer could be difficult to work with in the future. However, if it's a customer you'd like to hold on to, then offer a price drop, but require something in return, such as a longer contract or an earlier closing date. Companies rarely close their doors because their prices are too high. More than likely, their prices are too low.
Be persistent, and find the option that best meets the needs of your customer.
About the author: Amy Kirkegaard is a freelance writer who writes on a variety of topics, including money-saving ideas and shopping on a budget.