Today’s guest post is by Tom Reilly, author of Crush Price Objections, a McGraw-Hill book to be published in 2010. You can learn more about Tom on his website.
Price resistance is the nemesis of most salespeople.
Our research shows that 72% of salespeople cave in when the buyer resists price.
This results in companies losing millions of profit dollars every year because their salespeople fail to defend their prices.
They discount when they should hold the line on prices.
There is a blend of emotional and tactical reasons why salespeople relent on price objections. How many of these ten reasons apply to you?
Emotional reasons why salespeople lose to price objections:
1. Fear. You fear losing the sale. Fear is a powerful motivator—more powerful than greed. Humans are hard-wired to detect danger and nothing signals danger more for a salesperson than the possibility of losing a sale.
2. Guilt. You feel guilty selling at that price. Other customers may be paying less and you feel guilty charging more to this customer. Wrap in some fear that the buyer will discover others pay less and your guilt is amplified by your fear.
3. Conviction. You do not believe that your product is better than the competition’s product. You lack the passion you need to defend your price. It’s difficult to convince others of your value when you suffer from a lack of confidence in your package.
4. Exhaustion. You are tired of the battle. You believe that it takes too much effort to hold the line on your prices. You feel that it is easier to discount than fight for your profit.
5. Courage. You give up too early. You lack the will to continue. Your fear is too overwhelming and you decide that it is less painful to cave in to your fear than fight for your profit. When buyers object to price, first they test your price; then, they test your resolve.
Tactical reasons why salespeople lose to price objections:
6. You fail to penetrate the account high enough to talk to the high-level decision maker who controls the purse strings. Research shows that 90% of salespeople do not penetrate at this level, mostly because high-level decision makers intimidate them, or salespeople fear alienating a lower level contact by going over their heads.
7. Your buyer is more prepared than you are for the price discussion. There are many legitimate reasons to lose a sale—wrong product, availability, and even price—but being out-prepared for the negotiation by the customer is not one of them.
8. You lack the know-how to hold the line on prices. You never learned how to fight this battle tactically. This generally means a lack of training.
9. You copy a price competitor’s price strategy. You cannot be an industry leader if you are a follower on price. You alone control your prices. The competition may cut their prices, but you cut your prices. Copying them means that you tacitly admit your product or service is no better than the competition’s.
10. You quit too early. For whatever reason, you stop selling before the buyer stops buying. Maybe it is a lack of resolve or knowledge of how to continue the battle. The sale is never over until you or the customer calls it off. Why would you quit if the buyer does not quit?
Do you see yourself in any of these reasons? If so, use this insight to improve your results.
Study. Prepare. Infuse yourself with passion about your product.
Be ready for price resistance. Anticipating that price may become an issue is not the same as soliciting a price objection.
You need not fear price resistance if you are prepared and believe in what you sell.
You need not feel guilty holding the line on price when you are convinced of your value.
You need not give up too early when you are prepared for the battle.
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