How many times have we seen this before? You are in the middle of negotiations and everything seems to be going well. You hardly see any resistance but as soon as the price negotiations start, you hear sentences like ”we don't have a budget” or “the offer is too expensive for us” or “talk to us again next year”. How often have you tried to convince your customer and even sometimes offered big discounts but the customer disappeared and was never seen again.
This is a very frustrating moment that definitely happens too often. Here is good news. This situation has one simple reason why it happens and it is very easy to fix. However, like all good things in life, it comes with some ”bad news” too. The fault of failing lies with the sales professional only, never with the customer, and only the sales professional can fix it.
Never forget that price value objections are not based on rational facts but only on an emotional and subjective measurement of the customer.
Let's play a little game to explain: Imagine you are your own customer and looking for an innovative solution to your current pain, whatever it may be. After doing your personal market research and having at least 10 companies pitching you, you do a first pre-selection. 4 out of 10 companies remain. 3 out of the 4 remaining companies offer their services for exactly the same price. In addition all 3 companies have the same positive reviews in social media and none of your acquaintances can give you a helping hand. What are your next steps? How do you differentiate the services of the 3 companies in order to understand which of them is the best? As your own customer you would act like 93% of all buyers. You would build a matrix and compare the values you understood as well as potential objections, based on the information from the calls/website, and then select the service which suits your needs best.
If we see negotiations as an interplay of presentations and perceptions, we need to understand that all perceptions are impressions of how the buyer sees the product or services the seller presented and how the buyer measures what he will get out of it, using the seller’s product or services. The match between the understood values and needs of the buyer creates the so-called “price value”. This is the willingness to pay - how much the buyer will spend for the product or service. The greater the intersection between values and needs of the buyer the higher the price value would be.
In simple words - Focus only on what your customer wants to buy and not what you want to sell.
It is important to understand that the price value is a buyer's measurement. It is never the values you identified or you believe is worthwhile to use for your product and services. The price value is only the perception, feelings and impressions of your customer. It is only about what they see in you and how strongly they believe in your abilities to provide what you presented.
Let's do another game: Imagine you are sitting at home and all the ‘Black Friday’ offers are flying in, advertising all kinds of products you may like to have or you totally don't need. You are getting impressed by the high amount of discounts you can get and your attention falls on a new smart TV. A good brand, a lot of features and just $1,350 instead of $2,500. After some thought you decide against the offer. Your TV is still doing its job and you don't actually need a new one, even if the new one is a whole lot better.
Now, let's turn the wheel of time a little further. One evening you turn on your TV because you want to watch a new episode of your favorite series. It's the last episode before the big season finale and everyone in your company is talking about it. Your TV stays silent because it seems to be broken. You’re obviously annoyed but after a few moments you get a grip and make a decision - You need a new TV and fast. You are reminded of that Black Friday offer from months ago and stop by the store. They still have this beautiful smart TV but now at a price of $1,999 instead of $2,500. You buy it and on that same evening sit happily in front of your brand new TV and watch the missed episode on VOD.
As this example clearly shows, the actual sales price is completely irrelevant. All buying decisions are influenced by the price value only. In the first part of the example the needs and values for the buyer were far apart, a price of $1,350 was still too high. In the second part the needs and values overlapped much more strongly, and the same buyer wasn't only ready to buy, but they also accepted a price that is 48% higher.
Focus only on what your customer wants to buy and not what you want to sell.
This is the big key to success for any sales professional. Focus only on what your customer needs and wants to buy and not what you are able to sell. Following these 6 steps and price value objections will finally become memories of the past.
Identify the surface pain points -
Understand what pain points the company has. Analyse them and assign these to the 4 classic pain groups/categories. Then understand which group/category is causing the greatest problems. Summarize the facts and show the client that you understand.
Understand the circumstances -
Understand how each pain group/category affects the entire company. Try to guess what the future changes will cause and whether it could have positive effects in other areas as well. This includes the personal situation of the negotiating partner.
Increase the pain -
Focus on the greatest pain and ignore all others. Increase this pain and deepen the feeling in the customer that there is no way other than to act immediately and make changes. Centralize the customer's thoughts on the future.
Pitch your solution -
Only present what the customer needs and not what you can offer as a whole. Use words and phrases of the customer. The first presentation’s only goal is to show that the customer’s needs overlap with your value as much as possible.
Expect objections -
No deal without objections. You need this to understand which values the customer understood and which not. Pay attention whether the objections are general ‘excuses’ or actually relate directly to the problem.
Rephrase your values -
Lead your second pitch with the benefits for the customer and support it with your features or facts. The focus must be on the effect you can bring to the table instead of the product or services. The customer must feel that you are only there for them.
Never forget that price value objections are not based on rational facts but only on an emotional and subjective measurement of the customer. Therefore, it makes no sense to discuss or negotiate the price. Even subsequent discounts are perceived as counterproductive, as they seem like you're trying to brush away the concerns as irrelevant. The only strategy is to connect the values and benefits you can bring to the table with the needs of your customer and keep the discussion as long as possible on an emotional level, to keep the price rejections as low as possible.
However, if price objections appear here and there, remember the 6 steps above and take them seriously. Understand that the customer has not yet fully understood your values and benefits. Make sure they understand them better before you take any further steps.
If you find my tips valuable but still don't know exactly how to change your cold calling/mailing, I’m inviting you to write me an email and you will get a training session free of charge - how to take your specific challenge and form together a path to success. My email is: chris@forty-two.digital