If you’ve ever been on a sales call where a price objection becomes the reason a prospect backs out, then you know it can be very frustrating.
You’ve spent time learning about your prospect’s company and their day-to-day struggles.
Then, you explain and demonstrate a service or product that you know can eliminate those problems.
But after delivering the pitch, the prospect says something like:
“It’s too expensive.”
“That’s just not in my budget.” or
“The price is too high.”
That’s when most salespeople drop the ball.
They get stumped and begin immediately discounting the product/service and let the customer take the lead.
As the salesperson, your job is to lead the customer to a product you KNOW will be beneficial to them. Not discount and ultimately sabotage the perceived value of that product.
In this blog, we’re going to dig into why a prospective customer is objecting for financial reasons.
And then provide you with a step-by-step process to confidently overcome those objections, close the sale, and provide your new customer with access to a great product that you know will help them…WITHOUT having to discount it into oblivion and erase your commission check!
What Price Objections Really Mean
There are two different types of price objections.
“I can’t afford it” can simply mean logistically they do have financial obstacles and if those weren’t in the way they would be 100% on board.
“I can’t afford it” can also be a smokescreen prospects use when they are uncertain. If they can afford the product then what you are really facing is an uncertainty objection.
A common uncertainty objection is – is this the right thing and is now the right time?
You, as the salesman, can still overcome those obstacles if you continue asking questions in order to better understand the objection. They need to feel confident about making a purchasing decision and seeing the benefit of the product once they get in and start using it.
We’ve all bought something we couldn’t afford. What makes us do that? Desire.
Your goal is to boost the desire for the product by sharpening the benefits and removing those secret objections.
How to Overcome Price Objections: An Effective 5-Step Process
Price objections are often a coverup for the real reason why a person won’t make the commitment to a product.
Once you are able to pinpoint the prospect’s reason for their objection, you will be able to know how to proceed in confidence.
Like we talked about earlier, there are two different types of financial objections:
- “I can’t afford it” uncertainty-based objections
- “I can’t afford it” logistical objections
First, you must isolate the type of objection and then you can defeat the financial objections for good.
1. Isolate the Type of Objection
When you hear a prospect say, “the price is too high” your first response should be “no problem.” Throughout the sales process, you always want to remain indifferent to avoid putting pressure on them.
No one likes pressure. They need to feel like you are genuinely helping them find a solution to their problem. (Which is what you genuinely should be doing).
Then, you isolate the type of objection you are encountering.
Why?
Because you need to know which path to take to best serve the potential client.
If it’s an uncertainty objection then, the question they are probably wrestling with is “is this the right thing and is now the right time?”
If that is the hold up, then the perceived value of the product or service as well as the ROI needs to be revisited and re-explained as to how it will benefit their company.
If it truly is a budgeting issue or a logistical financial situation, you confirm that is the issue and then “tie it down.”
Meaning – you get them to verbally commit that they want in and that it’s simply a financial issue.
You’re essentially isolating the holdup for them again and reconfirming that if money wasn’t an issue, they know this product would be a huge asset for their business.
And now that you have isolated the issue to strictly a financial objection, you can move forward to the next step.
2. Get Permission to Talk about Their Finances
This one is tricky.
Not because of what to say or how to say it (because I will give you the full script)…
…it’s tricky because most people feel uncomfortable asking such an invasive question.
But, there is a right way to do it!
You have to ask these questions confidently, otherwise, the prospect will be able to tell by your tone that you feel uncomfortable and then they in turn will follow your lead.
The reason behind asking permission to understand their financial situation is because you want to help them make this work. You just had them confirm in the previous step that they recognize the value of your product and would move forward if it wasn’t for finances.
So, all you are doing in this step is finding a way to make this happen for them.
Too often, salespeople will get on the phone, make the pitch and then at the first sign of pushback on price, they begin discounting the product – ultimately destroying the perceived value of the product.
We encourage offering customizable ways to help people, depending on their own personal financial situation.
Instead of dropping the price, allow some wiggle room with the “pay-in-full” plan. If they truly can’t afford it and you know because you just went through their finances with them, it would be ethically questionable to encourage someone to max out their credit, cash in their emergency fund, and take a serious hit financially in order for you to make a sale.
Instead, build trust. Show the prospective client you care. You want them to have access to the product because you know it’s going to change their life. But, you don’t want them to break the bank either.
You are remaining indifferent, which again alleviates the pressure from the prospect. Letting them know that even if they don’t move forward today, you want to help them with a game plan for the future since you know they really want to do this. That kind of language creates trust and diffuses any kind of tension.
Offering a payment plan can be the best way to overcome financial objections. You are assisting a client so they can afford a product that will help them and their business while also offering a break on the amount they put down.
But, it’s a give and take. If you offer the payment plan, are they going to make the decision to move forward right now?
If you close the sale, it’s a win/win.
You gave a little and they gave a little to make it happen today.
3. Perceived Value
If the prospect doesn’t understand the perceived value of the product, then the groundwork of the sales call was never really solid, to begin with.
A potential customer needs to understand the value of the product they are considering, especially if that product is upwards of $5k plus.
Walking through the product step-by-step and letting them see all of the things they will be getting access to and the ways that this will provide more security, income etc. for their business is the way to set the rest of the sales call on solid ground.
A customer needs to be excited. They need to realize this is the product they have been looking for, the answer to all of the problems they have been encountering in their company!
How is your product going to turn their business around for the better?
Why is it more expensive than your competitors? Have you done a deep dive on what competitors offer?
Checking out what competitors are selling and what they provide will help you to speak to what sets you apart in the marketplace.
If you are consistently dropping your price and offering deep discounts, your perceived value will begin to dwindle. People instinctively believe that a more expensive product is better and if they think it is being cheapened, they don’t believe in it.
A great example of this is the first at-home hair dye product. When this product was originally put on the shelves of stores in the 1940s, the MSRP price was extremely low, which led women to believe it couldn’t actually be good.
The product was then removed from the shelves, repackaged, and listed for a much higher price. The result – they couldn’t keep the boxes of hair dye in stock.
The perceived value was higher and it made people trust the product more.
4. Explain the ROI
Explaining the ROI (return on investment) is another huge factor in building a steady foundation of trust and value on a sales call.
A potential prospect needs to see how your product or service is going to benefit their company. What will the payoff be and how long will it take to see the expected results?
Showing case studies and real reports from other clients provide further proof and begins to solidify the trust you need to create in order to break through any other objections you can experience in a sales call.
The return on investment is why a prospect is talking to you in the first place. They are looking for a solution. Provide real statistics, reports, and testimonials from current clients to build confidence in your product as soon as possible!
5. The Importance of Confidence
We’ve discussed this to some length already but here’s the bottom line. As a salesperson, you will encounter objections. Statistically, it’s bound to happen (and often).
The way you handle those objections is key.
Keeping a level head is most certainly professional and expected.
But, also having a full understanding of the company you are pitching for, knowing the ends and outs of what the product does or what the service provides in terms of value and ROI, is so important.
Doing a deep dive into the competition is also extremely important. If a prospect brings up a competitor you will know immediately how to respond and how to speak to the value and offerings your product brings to the table compared to other companies.
Being fully educated on the product you are pitching allows you to feel confident, which automatically builds trust and helps eliminate objections faster.
10 Great Responses When Prospects Say Your “Price Is Too High”
1. If price wasn’t an issue, is this something you would be interested in?
This question allows you to break down the financial objection and find out if there is something else other than finances that you need to address first.
2. 3-5 Seconds of Silence
This technique can be very effective in allowing the person to fill the awkward silence gap with valuable information that can help you decipher exactly what they need to make the sale or what their potential fears could be.
3. You Think It Costs Too Much?
Making them respond to their own statement and backing that statement up helps you to know how to move forward with the call.
4. How Much Were You Hoping to Spend?
Putting this question back in the prospect’s court allows you to understand where they are financially and forces the prospect to give you an answer on their perceived value of the product.
They will either help you to see that they are way in left field on what they were hoping to spend or that they were bluffing in hopes you would offer a quick discount.
5. Do You Think You Will Be Better Off Doing Nothing?
During the sale call, while asking questions about their companies’ struggles, you were able to develop much-needed intel into the health of their business.
So, asking the question, “Do you think you will be better off doing nothing” makes them realize that doing nothing could seriously hurt their business in the next several months. Leaving them with the choice to take action and start implementing real proven steps to eliminate this possibility.
Or, do nothing and wait.
6. Why Do You Think This Product is Too Expensive?
Bluntly asking this question helps you to gain an understanding of what kind of objections you are actually dealing with.
7. Is There a Less Expensive Option You Are Considering?
Are they comparing your product to other products on the market? If so, then you can easily address those concerns and differentiate what your product offers compared to the competitor.
8. Is This a Cash Flow Issue or a Budget Issue for You?
Understanding their financial situation can help you to create a solution that works for both parties. If it’s a cash flow issue, they are probably hoping for a discount and if it’s a budget issue, then a payment plan may help to alleviate the financial stress they are feeling.
9. Make a Comparison between Price and ROI
Making a comparison between the price of the product and the return on investment can help prospective buyers step outside of the “right now” to see the bigger picture.
If they can look past the initial investment and see that the product or service you are offering can actually bring in more value than the upfront cost of your product (within XYZ days), then you are resolving short-term fears and encouraging long-term vision.
10. Tell a Customer Success Story
Everyone loves to hear a success story. Motivate and encourage your prospective buyer by telling a real story about one of your clients — how they purchased your product and what their results were.
Asking these types of questions helps you to know how to move forward, what the main issue is for them and how to help find a resolution.
The Ultimate Sales Script for Overcoming Price Objections
After reading this blog, you may be thinking, this is all super helpful — but asking my lead for financial information feels risky. I’d have to know exactly what I’m going to say before I tried that.
A script would be ideal, right?!
I thought so too. That’s why I created an entire video giving you the full script on what to say and when to say it.
I’ve used this exact framework successfully on countless sales calls. It’s proven to work not only for me personally, but also for the teams of salespeople I’ve personally trained.
If you run into this objection often, click here to get the training and try another route to overcoming price objections to close the sale!