As one of the world’s wealthiest men, I think it’s safe to say that American business magnate Warren Buffett knows a thing or two about sales. And he certainly had a point when he uttered the famous words: “Price is what you pay. Value is what you get”. This is valuable advice on price objections.
In our field, objections based on price are pretty common. But my view is that price is something clients invest in. In most cases, a product or service that requires a higher initial investment is more cost-effective because of the value it delivers over time.
How can salespeople demonstrate this value? Well, the first thing they need to do is to understand the competition. What is their competitor’s entry-level price and what does their product or service promise in the short and long-term?
Say your company sells an expensive but highly concentrated brand of washing up liquid, and your competitor sells a much cheaper version. One way of tackling a sales objection in this scenario would be to look at how long your bottle lasts over a specific period of time compared with the competitor’s.
If a single bottle of your product washes twice as many plates as the competitor’s, it wouldn’t be long before it starts representing value for money. The key, however, is for the salesperson to quantify this cost-saving. And one of the very best ways of doing this is to use the lowest common denominator (in washing-up terms, the cost of washing per plate).
My top three tips for overcoming price objections, then?
- Know your and your competitor’s offer
- Demonstrate (and, if possible, calculate) the added value you can deliver over time
- Present your price using the lowest possible denominator, focusing on value. (As Warren would doubtless confirm, value is what the savviest customers are looking for, after all!)
Put learning into action with the eLearning module ‘Handling Price Objections’
By Lorna Leck, Managing Director of The Sales Activator® Ltd. For further learning why not try the Sales Activator's eLearning course 'Winning Presentations'? It is designed to benefit all levels in Sales and Service, and is packed with useful tips and exercises to help you deliver a high impact presentation. ‘The Art of Closing’ is written by Lorna Leck.