The price objection is the curse of every salesperson’s life and yet, as sales managers, we do little to help our people deal with it effectively.
Despite what we seem to believe, unless you’re involved in transactional or commodity-type sales where price is the be-all and end-all, price is NOT the primary factor in the customer’s buying decision. It’s a safe bet that price is always going to be a factor in every sale but it is rarely the deciding factor, particularly in non-commodity sales.
The results of various surveys taken over the years show that between nine and fourteen percent of buyers will put price first in their buying decisions. This means that 86 to 91 percent of buyers have other factors they consider more important than price.
One of those other factors is confidence. Prospects want to be confident that you’ll do what you said you’d do, when you said you’d do it. Confidence comes from building trust and rapport with your prospects. One of the fastest ways to destroy rapport and therefore confidence is for the salesperson to start selling before he really knows what the prospect wants to buy. That’s sort of like the doctor who gives you a prescription before making a diagnosis. How much confidence would you have in the doctor? Probably not much. Your salespeople need to learn to properly qualify before they sell.
A second factor is choice. Prospects don’t like to be in a position of having just two choices — to take it or leave it. Any time your salespeople can offer the prospect a choice, they strengthen their selling position. This is a particularly effective strategy when you are being compared against a competitor. Instead of the situation being one of them versus you, it becomes them versus you, you, and you. Much better odds. Teach your salespeople how to effectively use this technique.
Another factor is service. Prospects want to know you’ll be there after the sale is consummated and that you’re not going to sell ’em and leave ’em. You need to assure them you’ll be there if (or when) they need you. Make sure your salespeople are equipped with evidence or testimonial material to help remove the FUD factor (Fear, Uncertainty, and Doubt).
The last factor is value. Prospects want to know they’re getting the best quality for their money. This is probably the single most important factor in non-transactional selling and one where many salespeople could use some help. Are your salespeople talking catalogues or are they truly able to create value in the prospect’s mind about what they are selling? You need to make sure your salespeople really understand the value of what they’re selling.
Why Should I Buy From You?
Here’s a test for you to try with your salespeople. Ask them, “If I were a prospect, why should I buy from you?” and see what kind of answer you get. Can they give you a value-based reason or do they fall back on the “well-we-have-a-good-price” type of response that gets the prospect thinking dollars and cents again. Some salespeople are so taken aback by this question that they sound like they have a mouth full of marbles as they stumble through their answer. Now that really instils confidence.
If the salesperson doesn’t know why a prospect should buy from him, it’s a safe bet that the prospect doesn’t know either. If the prospect can’t tell the difference between you and your competitor, they are more likely to make their buying decision based on price.
In order to move the prospect away from price as a prime consideration, salespeople must be able to articulate what additional value they bring to the offering. Not all the added value is in the product/service you offer. You have many hidden factors that would be of value to the prospect if they only knew about them.
Typical hidden values are: number of years in business, years of experience, organizational background, family-owned business, highly trained service staff, certified technical people, free delivery, toll-free ordering, money-back guarantee, life-time warranty, location(s), easy access, technical capabilities, past relevant experience, strategic alliances, personal attention, etc.
Salespeople need to be aware of these hidden values and know what they mean to a typical prospect so they can effectively answer the often unspoken question, “Why should I buy from you?”
The Value Iceberg
I recommend you walk your salespeople through the “value iceberg” exercise at your next sales meeting. Draw your best rendition of an iceberg on a flip chart (or whatever) and title the part above the waterline as “price” and the part below the waterline as “hidden values.” Point out that your prospects often just see the tip of the iceberg—the price—and they need to be aware of the hidden values that can impact a sale. Brainstorm with your people until you’ve developed a list of hidden values that you offer. If you can, get them to put a dollar amount on as many values as possible.
This exercise will help your salespeople know and appreciate the additional value they and your organization bring to the sale. Being able to effectively explain these to their prospects will help move the prospect away from price as his or her primary decision factor. Remember, it’s important to sell value because if prospects can’t tell the difference between what you’re offering and what your competitor is offering, then they’ll make their decision based on price.
Once you help your salespeople deal with the other factors that impact the buying decision and teach them to sell value before price, they’ll never go back to selling on price again