Disarming
the Price-Squeezing Customer
Paul Cherry on Price Objections
What's a salesperson to do when customers are more concerned with
getting a low price than getting the best value for their money? Find
out how to get customers to look past the price tag by uncovering
what they value most.
You've been prospecting this company for ages, and finally got your
foot in the door. You're apprehensive because you're meeting with
the purchasing agent –– not the big boss, but it's a start
–– and you know you'll get hammered on price!
The agent shakes your hand. "Tell me what you can do for me -
and how much it'll cost me." Already, he's squeezing you on price!
You want to make him recognize the value of your business solution.
He only wants to dance around it, singing, "Sure, value's important.
But how will you save me money?" To land this sale, flip the
record and hear what he's really singing. Here are six techniques
to build rapport with mid-level decision-makers and prevent them from
getting hung up on price.
Understand their biggest values
For purchasing agents, this issue runs deeper than price or value.
They want to feel like they matter. They deal with so many salespeople
making promises that you become just another face in an increasingly
maddening crowd. They're exerting what little power they have on vendors
like you, and keeping an iron grip on that low price is the most obvious
way they can prove their worth. Their biggest values are:
- Recognition from the boss and colleagues. They want to be recognized
and rewarded for getting the lowest price, so of course they'll
try to get it. Like all of us, they want the boss to say, "You
just saved the company thousands of dollars! High-five!"
They want their colleagues to think, "I want to be as successful
as he is so the boss will high-five me, too!"
- Justification. Their self-esteem soaring, our money-conscious
front-line managers think, "I've saved my company money!
I'm valuable! My job's safe!" They've justified their existence,
confirming to the company and the boss that they're a "keeper."
Understand their fears
Most people are satisfied with something average. With fears ranging
from leaving their comfort zone, to spending more money than the boss
wants, to getting fired, they're more likely to passively avoid what
they don't like than to actively pursue what they want.
Understand what they're up against
Most people want to do a good job and make a decent living, but they
also want to clock out at a humane hour and have time for a life.
Meanwhile, they're competing for resources, clamoring for attention,
mired in daily obligations. Consequently, they unwittingly overlook
the bigger picture. Show that front-line manager a solution that'll
bring the big picture back into focus. Pitching how you can help his
company increase profitability is more meaningful when it directly
impacts his year-end bonus. Maybe he's thinking, "Yeah, like
my boss needs to drive another new Lexus while I can barely get around
in my ten-year-old junker!"
Understand their need to feel appreciated
When companies keep a narrow focus on increasing profitability, people
can slip below the radar. When the company has a great year, the CEO
rarely says, "We owe it all to our purchasing agents toiling
down in the basement, saving us 5 cents apiece on widgets."
Many workers you deal with feel overworked and under-respected. All
they ask is that you make them look good. Provide them with solutions
that will take paperwork off their desks and keep their bosses happy
with them, and they'll be happy with you.
Focus on the lowest TOTAL cost
Avoid getting cornered on price by talking about the lowest total
cost. Instead of just the up-front, out-of-pocket cost for the company,
show how lowest total cost results from on-time delivery, faster time
to market, support, quality, peace of mind, ease of use, reduced down
time, overhead, and labor.
Utilize questions to uncover what your customers value
Understand what makes customers tick; see what's really driving them.
When you hear "lowest price," don't scamper like a squirrel
–– instead, ask good questions that go beyond the price
issue. You'll find out what they really want and why they want it,
as opposed to what they're telling you they want.
Add some of these questions to your arsenal of sales techniques:
"Share with me the criteria you use when you're selecting a _____."
"When it comes to price, quality, service, delivery, performance,
customer support, and ease of use, which matters most to you? Which
matters least?"
Say your customer cited performance as a priority: "You mentioned
that performance is important to you. Would you share with me your
definition of performance?"
"So that I'll best understand your needs, can you walk me through
a situation in which your standards for performance were not met?"
"Let's assume you're looking at three potential vendors who meet
all your criteria (including price). How would you make your final
decision?"
"You mentioned that the most important thing for you is price.
How does that compare to what engineering (manufacturing, design,
production, marketing, fulfillment) thinks is most important?"
"What's most important to your customers?"
"Think back to when you first chose your current product. What
were your selection criteria? Based on what you know now, how would
those criteria change?"
"Think ahead to three years from now. What do you anticipate
will be most important at that time - the initial price of the product?
Or the peace of mind you'll have, knowing you're getting the necessary
support long after a purchase was made?"
"Which characteristics of this product are 'must haves' for you,
and which are optional?"
"The changes we've discussed would result in an increase in profits.
What would you do with that increase in available funding?"
"What alternatives to this problem have you considered?"
"You have told me that your company has allocated $_____ for
this product. How was that amount determined?"
Show your customers your solution will help solve these problems.
Get them to define value based on their specific needs, and it'll
be much easier to justify your solution as a smarter investment over
lower-priced alternatives. Once you know your prospects' needs, inside
and out, you'll be able to present your services and solutions as
a great value at any price.
Paul Cherry, President & CEO, Performance Based Results has
20 years experience as a sales training consultant with an emphasis
placed on sales training, leadership development, sales coaching and
leadership coaching. He is one of the foremost experts on sales questioning
methods and techniques. Visit his website at: www.PBResults.com.
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