Overcoming price objections is something you’ll have to master to succeed in the science and technology marketplace.
Maybe you’ve already put months into a deal and your customer says you’re more expensive than a competitor. Or maybe you’re just trying to get your foot through the door but a customer has seen your list price and won’t give you the time of day.
Either way, you know it’s likely to come up. So why not prepare for it? Here, we discuss why price is often a false objection and how to overcome price objections without resorting to hefty discounts.
Dealing with price objections early
Sometimes, price can be a real objection. A customer may not have secured the funding they applied for or there’s simply not enough money in the budget to meet your price point. If you’re down the bottom of the sales funnel, then ask yourself: why am I only just finding this out?
The complexity of products, the need for extensive evaluations and approvals, and the requirement to build relationships with multiple stakeholders mean sales cycles in the science and technology marketplaces are long and involved. So, make sure you don’t put 6 months of time, energy and effort into a deal that falls through due to budget. Instead, “deal with the monsters while they’re small”.
Price can be a sensitive topic. Buyers will be evaluating the price to value trade-off. Mentioning price without clearly communicating the value will turn your prospect off – especially if you’re one of the more expensive options on the market. However, being cheap isn’t always a benefit – it can raise suspicion and lower your brands perceived reputation.
However, like all objections, the best time to deal with a price objection is as soon as possible, when your customer is still at the top of your sales funnel. By tackling any price objections early, you could save yourself and your colleagues days, weeks, or even months of wasted work.
Find out if price is the only objection
Most of the time, price is a false objection. It’s an easy excuse to make you go away, it’s an attempt to push back on price to get a discount or most commonly, the product or service isn’t worth what your asking in the mind of the prospect. In other words, they have objections that are not about the price.
“You’re too expensive”
“Your competitor is cheaper”
“We haven’t budgeted that much”
Too often, sales people give in at this first hurdle, especially if the customer is nearing the end of the sales cycle. But do you really need to?
What we really want to do is move the conversation on and talk about our value, our USPs, and our strengths. But before you launch into what you think is valuable about your product or service, it’s really important to understand what the customer sees as value and check whether price is your customers only objection. It can be as simple as asking: “Is price your only concern?”
This is a powerful question that can help us check whether the price is a real objection and gives your customer a chance to share what’s valuable to them. Understanding what they consider to be of value guides you on how to sell to them.
Don't lower the price, communicate the value
If a customer reveals another objection when you ask if price is their only concern, you’ve gained an important glimpse into what value means to them. Take the following conversation as an example:
Customer: “We’ve considered all the products on the market and your instrument is too expensive compared to the others we’re looking at”.
You: “I understand that price is a concern for you. Do you have any other concerns with our instrument?”
Customer: “I also think that the software interface is too complicated to use. Your competitor has a more intuitive interface.”
You’ve hit a goldmine! In the above example, it is clear that having a straightforward system is important to your customer. Maybe they teach students or have a high lab staff turnover and therefore require software that’s automated or quick to get to grips with. With this information in your arsenal you could:
- Discuss training options and show how effective your technical support team are.
- Show how you can automate processes.
- Create step-by-step cards that can be placed by the instrument.
Always remember that words aren’t good enough at this stage, especially when speaking with science-centric people. Make sure you can demo or show data to back-up your claims.
“Demonstrations can be really powerful. In this instance, it would be a great idea to organise a demonstration and brief your demonstrator to show your customer how an inexperienced user can use the system. If there’s any automation, show them how easy it is to have a ‘walk-up’ system.”
Pru Layton, Senior Trainer at george james ltd.
Whether it’s an easy to use software, a feature that’s lacking, or a reservation about data quality, digging out the real reason for a customer’s price objection creates an opportunity to sell. You can begin to build the value in your customers in mind so you can justify your pricing. And, if you can abate this concern, you’ll create a clear path towards a deal – without discounting.
Dealing with price without discounting
What if price is the only objection? What if your customer simply refuses to give you any other reason to not buy your product beyond the price point? The conversation may go:
Customer: “We’ve considered all the products on the market and your instrument is too expensive compared to the others we’re looking at”.
You: “I understand that price is a concern for you. Do you have any other concerns about our instrument?”
Customer: “No, I think that the price point is just too high.”
In this scenario, it’s likely they don’t want to reveal their true objections to you or they want your product or service, but they’re just after a discount! There are several ways you can move this conversation on without immediately resorting to offering a discount.
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Ask more questions. You may ask them who they are comparing you to and what they offer. Ask them to outline what your competitors’ package lacks or if they see any downsides. This line of questioning can lead to understanding what the customer values and help you steer the conversation back to the strengths of your product or service.
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Offer one of your more cost-effective solutions. Maybe you have a different model with fewer capabilities . This is great for testing the waters. Your customer may raise objections about this model and you again have an opportunity to find out what is valuable to them.
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Discuss long-term cost effectiveness. Does your product have better longevity than your competitors? Does it use less reagents? Or does it have a reputation for being a robust machine that needs minimal servicing? How much would it affect your customer if the instrument broke down? The most important thing to remember is that you need proof to back up your claims!
“Back when I was in a direct sales environment, selling ion chromatography systems, I knew we were by far the most expensive on the market. But I also knew that our instruments were really robust and could run for decades. Alongside other data, I would show customers a photo of one of our ICP’s operating on a glacier in the Arctic. I would explain to them it had been running there for 30 years – without ever needing a visit from a service engineer. It was an extremely effective form of proof of value.” –
Pru Layton, Senior Trainer at george james ltd.
Preparing for price objections
Preparing for the price objection is fundamental – because you know it’s going to come up. It’s all about understanding what your customer values, so you can redirect your sales conversations to meet their expectations.
When you prepare for the price objection, make sure you ask yourself:
- What questions could I ask to uncover what my customer values beyond price?
- Do they have any other concerns about my product or service?
- Do they have any concerns about a competitor’s package?
- Does my product or service offer long-term cost-effectiveness?
- Does my instrument have lower reagent requirements?
- Does my product have built-in longevity or robustness?
- Is my product less likely to breakdown or need servicing?
- Do I have proof?
Finally, remember that although discounting has its place in science and technology sales, it should not be used as your number one tool for tackling the price objection. Attractive discounts will not only destroy your margins and lower your product’s perceived value but it can inadvertently re-position your products’ value in the eyes of the customer – and set the starting point for future negotiations at a lower price point.
Objection handling can be tough to start with but with the right toolkit, it simply becomes a natural part of our sales conversations. You may even learn to enjoy objections! However, if you need some help with objections then take a look at our tactical selling skills open program.
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