What is a pricing objection?
When a prospect you’ve had dialogue with doesn’t want to move forward with your service offering because:
“It’s too expensive”
“XYZ company doesn’t charge as much”
“It’s way over the budget they have in mind”
“They simply can’t afford it this year”
“They weren’t expecting to pay more than £XYZ for it”
The real reasons your prospect gave you a pricing objection and 13 tips to ensure PRICE doesn’t become an issue for them next time.
VALUE
Although this isn’t the ONLY reason, it does play the biggest part in pricing objections.
Your prospect isn’t convinced the price justifies your service offering. In other words, they simply didn’t see enough value and so they determined their own price.
Top tips:
- Don’t pitch them your specific prices until your prospect is blown away by the value you provide. How do you blow them away? Share lots of resources and give them your time. “Value proof” is in the pudding.
- Have you given enough value to feed both parts of the brain that makes decisions?
- Rational/Logical part i.e. what’s the return on investment? If I invest £10k and save £100k or make £100k, it’s worth it.
- Emotional part i.e. how will I feel or what would my world look like when this pain is taken away or I get to my desired goal?
- Before doing any of the above, find out what they would value the most.
- What’s their biggest problem or biggest desire?
- Have you really explored the biggest problems they have through great empathetic questioning?
- How can you show you understand what that is and you have what it takes to support them?
CREDIBILITY
Your prospect isn’t convinced you’re the person that can make their dreams come true or you’re the person who will take away whatever pain the problem is causing.
Top tips:
- If you’re the CEO/MD: train your sales team to become experts in your service offering. If you’re a salesperson: take interest in and aim to become an expert in your field. You don’t have to take on the role of the chief product officer but you need to feel confident enough to be able to have essential “techy” conversations.
- Ask them thought-provoking questions. Questions they haven’t asked or thought about themselves. They need to see they have a knowledge gap that you’re able to fill.
- Tell stories of how you’ve supported other people who are going through exactly what your prospect is going through and HOW they overcame the problem with your support.
- Show evidence of the method or model you use to get the results that you do. How does this happen and how do you break down the overall job into 3 or 4 stages that can de-risk the solution for your prospect.
- Offer to introduce them to your clients so they can learn firsthand how you’re supporting other people just like them.
- Explore all the different options they have – not just the option you’re trying to convince them to buy into.
EXPECTATIONS
Your prospect has already walked into the conversation with an idea of what they are willing to pay for something based on:
- Previous experience with similar service providers
- Competitor analysis
- Their own belief systems.
- Their calculations of costs and profit margin – which aren’t always right!
Top tips:
- Understand what these expectations are early on in the conversation. Ask questions such as ‘How have you gone about purchasing services similar to this before? What are the critical things you look for?
- Learn how they calculated profit margins in the first place and re-educate with the right facts/numbers.
- Prove how you differentiate from your competitors by walking the walk- not just talking the talk! Give them resources, give them your time and support them through their journey.
- What are their belief systems? Are they willing to pay for quality or are they simply looking for the best possible deal without thinking about the outcomes they require?
So there you have it: the real reason(s) you received a price objection from your prospect.
Whilst, it’s safe to say you’ve heard “it’s not price, it’s value” a few times, it’s important to dig into what it really means to prove and show “value” as well as the other factors that contribute to pricing objections but are often overlooked: credibility and expectations.
The next time your prospects rejects you based on the price, ask yourself:
- How much time, energy, and effort did I spend showing and more importantly serving my prospects with value. Did they genuinely see value in my service offering and if not, what can I do next time to really prove this?
- Did my prospect feel like I’m the person that can support them with their vision and did they feel excited with the thought of this?
- Could I have got a better understanding of what their expectations and buying behaviour is?
Hope this helps, good luck and share your thoughts. I’d love to know how you feel when you get a pricing objection and what you do to ensure you don’t! Email me nisha@thesbsa.com.
In the meantime,
Serve authentically, Sell brilliantly!
Warmest wishes
Nisha Vyas-Joseph
