Secret Weapon For Competing On Price

There are recent opinions spreading around on the bad practice of competing solely on price. The problem of slashing prices to win deals comes from two sources:

1. Salespeople don’t understand how their company makes money (nor where it breaks-even) on clients.

2. Salespeople lack the sales training to properly handle premature price objections.

I’ve got thoughts on both of these, with a secret weapon at the end.

Salespeople who have never been taught how their company makes money can’t be faulted for handling price objections poorly. These days, managers have got to walk sales professionals through their business step-by-step to ensure they’ll speak confidently and intelligently on money matters. Reps have got to know the numbers.

At the same time, salespeople owe it to themselves, with help from their sales managers, to be capable of handling premature price objections from a communication standpoint. Here’s a simple formula to follow:

1. Ask/Clarify. Make sure you understand the objection clearly by restating it back to your buyer.

2. Isolate. Find out if this is the only concern he or she has.

3. Answer. Tackle the objection or concern head-on with why your price is what it is. This should be done directly, with sound reason, and with a reminder of the client’s or prospect’s reason for looking for change.

4. Ask. Ask for buy-in to ensure the concern has been resolved completely, and ask again for their decision.

But don’t forget, principles come into play as much as technique when handling price objections. The principles include: maintaining your character and integrity by being direct, honest, and never misleading; avoiding carefully-crafted responses scripted by the gurus; respecting the personality of your buyer by not requiring an answer on the spot. Buyers deserve more than canned responses and are well versed in the scripted techniques anyway.

But above all, the best defense against premature price objections is a good offense. Prevent objections. Go into meetings with clients and prospects with the reputation of being the best, not the cheapest. Remind buyers of the reasons why so many others have chosen you over the years.

Your secret weapon for competing on price is this social proof, in the form of an avalanche of written and recorded testimonials, which can prevent pricing concerns from ever coming up. You present a book full of testimonials, you present a list of names with phone numbers that prospects can call to confirm or verify your reputation, and pricing concerns dissolve…