“The #1 closing secret to overcoming price objections is to actively listen to your client and simply create value that exceeds their expectations.” – John Di Lemme
Price sensitivity from customers is something that businesses deal with all the time. However, what companies seem to miss is that price objections by customers is usually an excuse and a way to get out of buying without stating other reasons. As customers, we too know that price is a major consideration and we definitely check the price of something before we buy, and evaluate the price in comparison to what we believe to be the value of a product. In evaluating price, customers usually want more information than immediately available or apparent about the product. Research shows that if people used price as the only parameter to buy a product, at least 93% companies would not be in business – that is a scary statistic. It would make sense therefore for every company to manage price objections by customers, and put strategies in place to appear unique and distinctive such as they are able to reduce price sensitivity in customers.
Is your company able to manage price objections by customers? If so, what are the steps you have taken to attract customers through other features of your company’s offerings? We believe that for a company to convincingly put forth pricing, it must first have the conviction that it is charging a price that matches the benefits and advantages of their products and the customer service it provides. We have mentioned before that no company can produce quality goods, or price their products appropriately if it does not understand its customers, and if it did not have deep conviction of the efficacy of its offerings.
While managing price objections by customers is essential, it is not necessary for a company to respond instantly and directly to the objection. It would be more prudent to get the customer to talk about the other considerations and apprehensions they may have regarding the product. By doing so, a company would show customers that it is concerned about every doubt they may have and would like to diffuse them. For the company the customer’s answers would provide a clearer and more complete picture of what customers expect, and what actions it should take immediately to address the concerns. As mentioned, price objections by customers are usually part of a larger issue, and it would behove a company to make the effort to uncover all or at least most of the underlying issues that would / could prevent a customer from buying.
While price may be a significant consideration, it is never a good idea for a company, especially during the sales pitch, to mention prices upfront. Any first conversation with a customer must revolve around finding out about their needs, expectations, and preferences. These must be responded to by highlighting the benefits and advantages of the products and services offered to enable the customers to see the value they would be getting. Discussing price early on in a conversation with customers, without discussing benefits first, usually takes away control from a company. The entire conversation then revolves around pricing, and other important factors go ignored.
The best way to manage price objections by customers is to move focus away from price. Sales and customer service personnel must be instructed to sell the value and benefits of the offerings of the company. This must be done immediately post understanding the needs, goals, and preferences of the customers, in order to lay before them the benefits of the products aligned with what they would need and want. Getting customers to see the value of what your company offers, and then weigh it against price, the chances of price objections and resistance would be a lot less. Good value comes at a price – customers realize that too, but unless your company can show them the value, they would not make the effort to understand it on their own. The fact is that a company basis the pricing of products on what it may have invested into them, but unless customers can see value, the company’s reasons to price a certain way would not be agreeable to customers. It would be imperative to manage price objections by customers since there is a very high possibility of them having seen the prices offered by other companies.
There are several ways for a company to show value to ‘combat’ price objections by customers. The important thing to remember is that it should be able to show differentiation and proof of better customer service in comparison to its competitors. The product guarantee and overall experiences must be one of the highlights when exhibiting value. Doing so will get your potential customers looking at your company and its products in ways they did not earlier conceive, and would be happy to pay an incrementally higher price for the benefits – both short and long-term – they can see they would be getting.
It is necessary to however, continually ask customers questions. This allows them to put forward their thoughts and apprehensions, which brings relief. Being heard is something that customers value a lot, and by allowing them to ask questions and receive answers, a company would be able to build trust and a connection with them. It is a lot easier to manage price objections by customers when a company has made in-roads into the mind and emotions of customers. Paying attention to their apprehensions and opinions makes customers feel special and valued – they are more likely to want to associate with a company that makes them feel important.
In managing price objections by customers, it would be necessary to afford them choices and options even in terms of pricing. If after a company has shown customers all the aspects of value and benefits, if customers still decide to choose a cheaper option, they should be able to buy it from the company rather than looking for another company from whom to buy. Even if a company believes that its prices are low, staying prepared for price objections by customers is a proactive way to manage the objections. Customers like discussing price since it makes them feel in control and involved – it would be best to find a midway / price such that they feel satisfied with the deal. Not only would the company be giving them some part of what they want thereby inching them closer to buying, but would also get an additional opportunity to highlight even more benefits for the customers.
In managing price objections by customers it is important to remember that dropping prices a lot could affect your company’s credibility. It could make customers believe that your company was trying to dupe them to start with, and the products offered are probably not as great as the company may be presenting them to be. A company must know where to stop dropping prices, and continually focus on selling the value of the products and customer service offered by it. As mentioned price objections by customers would always be there. Smart companies anticipate these objections and remain prepared on countering them by consistently showing value, such that even the needs of their own business are met sufficiently, and customers would be happy to buy and continue to do so later on as well.
