The Focus 53 Podcast: Business Systems, People, & Processes

F53-037: How Non-Sales People Handle Price Objections

06.30.2016 - By Ryan Ayres: Business Coach and StrategistPlay

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Show Summary: Today, I'm talking about handling price objections. I do not consider myself anything close to a salesperson. Not that there's something bad about most salespeople. I have done sales and I just do sales as everyone is selling at some point in time. I've sold multiple million dollars of services in the last five years and handling price objections is part of it. I have a system or process for it, which isn't necessarily the minute they bring up the price as an objection but it comes before that. It's not about the price. This is the most important thing you have to understand. To your customers, it's about the value or the value of the problem you're solving for them or the value of the opportunity that you're helping them with. Price is important for a lot of people but it's relative to the value that you're providing. Keep this in mind. It's not just for the customer but this should be your mindset as well. Here are some pieces of the process you can apply: Give them a glimpse into the pricing upfront. If your sales cycle takes a while or it's someone you work a lot with, make sure they understand this at a high level, if not explicitly, your pricing structure upfront. Don't waste your time to wait until the end of the conversation before you say your price and they'd just be shocked. Getting them down the funnel and springing the price on them may just frustrate them and get them upset. What was once a potential customer now becomes someone who doesn't like you and will go tell people about that. Buyer beware for yourself and beware to them that the pricing upfront or some version of it is important. Be aware of your competition's pricing. You don't need to bring this up but you need to be aware of where you sit in the market. If you have a premium product that you set above the price for your competitors then that's fine. But you have to be aware of that and be able to represent that in your value as well as when you're discussing them. Make that acknowledgement that you're a premium product. Please, PLEASE do not make it a race to the bottom for pricing. In many cases, people start out at a price point and then race to the bottom with discounts sales, and negotiations in pricing because they either feel sorry or they badly need to make money. Why you should not race to the bottom for pricing: - It totally erodes your business either from doing business in the future with that person. - It erodes your sales process and the value perceived with your organization. - If you do it once, I suspect you'll do it again and that person will tell other people. - You cut out your profits and it causes more problems than just holding firm on your price. Keep discounts at a very moderate rate and rarely. Discounts make sense from a marketing standpoint. But if you discount, do it at a very moderate rate and at rare or defined circumstances (like a repeat customer). Discounting is a very slippery slope. Don't build your business on them. It sends out a signal that you're really just fluffing about your value or that you're ripping your customer off the whole time. Price vs. budget You have to build value upfront so that you're really just talking about value. If it's a dollar amount, wiggle on it with some type of small discount at best but then it really turns into a budget issue. Two really big distinctions - your price and their budget. Your price is what it is. If it doesn't match their budget or their perceived value then let them figure that out. So hold true to your price. Prove your value and allow the customer to make the decision based on their budgets. Discounting is bad. It's not ideal. Books, People, & Resources: Eye9design - A boutique web design and WordPress agency that just celebrated 10 years in business (an eternity in the web design space). They built hundreds of websites for businesses of all sizes. Finding a web design company is hard. There are lots of options, lots of good ones but lots of bad ones. Let the team at eye9design take care of you. If you need a great website for a great price, visit www.focus53.com/eye9. Mention this ad and get 10%.

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