Overcoming the Price Objection: Our Three Rules Will Help You

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One of my colleagues recently shared a good article by Brandon Redlinger on handling price objections from Sales Management. I wanted to add our thoughts to the topic.

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Three Rules for Handling the Price Objection

ZEHREN◆FRIEDMAN Associates teaches both Selling and Negotiation skills classes, so we have a unique perspective on the topic. We have three general rules for sales negotiations that are particularly applicable to the price objection. Think of what happens immediately when we hear a price objection: it quickly becomes a negotiation! So here is our guidance:

Rule #1—Don’t Be Negotiating When You Should Be Selling

Sellers are way too quick to take their “sales” hat off and put the “negotiating” hat on. My own personal reaction to any objection, and particularly the price objection is, Why don’t they see the value the same way I do? Yes, I’ll even ask myself, Have I been unclear?

I was recently on a call with a client, who was interested in doing one of our classes virtually. When informed that the price was exactly the same as an in-person session, the client balked at the price. I explained that instead of a two-day class, the class would now be held as five, two-hour virtual sessions. The preparation and delivery alone would take a half-day each, or 2.5 days. (In reality, we’re not doing other training on those days, so in effect, it takes five days of instructor time—our only sellable commodity.) Oh, and it takes two of us to deliver virtual classes, instead of one of us to deliver an in-person class.

Rule #2—Grow the Need, Cost Becomes Less Concerning

Grow the size of the need, so the buyer is less concerned about the cost of the solution. The bigger the need, the more urgency the buyer feels, and the less concerned they become about cost. The less concerned they are about cost, the less negotiating they will do over price. (Like most sales training firms, we have a probing model we teach people to use in our classes—its entire focus is to grow the need in the mind of the buyer.)

One of our consultants was trying to sell training to the Purchasing Manager for parts suppliers to one of the Big Three auto manufacturers. Our person asked the Purchasing Manager, “What would it be worth, if all of your purchasing folks were so good at negotiating, that your cost-of-goods-sold went down 1%?” The Purchasing Manager responded, “It would have a $200 million impact on our business, and everyone in the department would get a big bonus check.” Needless to say, we got no pushback on price when we revealed what a class would cost.

Rule #3—If You Must Reduce Cost, Reduce Price Last

If you have to reduce the cost, focus first on issues other than price. Many sellers make this fatal flaw when dealing with the price objection. If I only cut the price, we’ll be done. Cutting price first will usually lead to other concessions that need to be made in order to consummate the deal. If price is what’s most important to me, why would I consider cutting it? What are ALL of the components of price in the mind of the buyer? What other costs can I negotiate with without cutting price?

Years ago, one of our salespeople was talking to a client who wanted to negotiate on price. Our seller determined that one of the client’s cost issues was not having a training staff to handle the administrative issues surrounding our classes. Our seller offered to arrange for the room/equipment at the client’s site, handle the invitations and pre-work for participants, and track the rosters for the classes. The client was so relieved that they actually paid MORE per class!

Conclusion

The price objection is a common occurrence for most of us in sales. Obey our three rules, and you’ll close more sales! AND, you’ll close more sales on your terms!

Selling Skills Best Practices, Part 1: The Biggest Mistake Salespeople Make

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What‘s the biggest mistake that salespeople make?

Selling is not telling. Selling is about serving. It's about them, the client, it's not about you at all. In this short video clip, Joe Friedman highlights the biggest mistake that salespeople make and how to avoid making it.

Selling Is Not Telling

When I took my first sales class, 25 years ago, the answer to that question was: “They don‘t ask for the business.” Over the years, sellers have gotten very good at asking for the business. So, that’s not the biggest mistake they make.

The biggest mistake sellers make is that they continue to talk too much. Sellers love to focus on the companies they represent, the products they sell, and the amazing features and benefits they can provide to their customers.

Think of this scenario: Have you ever walked into a store and immediately salespeople descend upon you and ask “Can I help you?” “Can I show you something?” “Do you have any questions?”

How do you feel when salespeople treat you that way? And we always ask our clients, “Would you ever treat your prospects and clients that way?” And immediately they say, “No! We’d never do that.” But is it any different when, too early in the conversation, we turn the focus to us, our company, or the product we sell.

Selling is about serving…it’s not about you at all.

The answer to what you ought to do is as old as the problem. Selling is not telling is a saying that has been around for years. It focuses on the need to ask questions as opposed to talking. Selling is about serving. Selling is about them—the client, the prospect. It’s not about you at all. The more you focus on them, the better off you’ll be when you’re selling.

ZEHREN♦FRIEDMAN offers a full range of selling skills courses to help you sell better.

Read more here: http://zehrenfriedman.com/skills-training/sales

 

Cold Calling Tip #5: Value to “Them” Gets You in the Door

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Cold Calling Tip #5: Value to “Them” Gets You in the Door

What happens when you’re cold calling and someone answers the phone? There are some basics you need to have ready. You won’t have a lot of time. What is the purpose of your call in terms of value to them?  Expressing the purpose of your call in terms of value to the person you’re calling can get you the time you need to get the meeting.

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Cold Calling Tip #3: How to Make a Cold Call Warmer

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Cold Calling Tip #3: How to Make a Cold Call Warmer

One of the challenges that we all face when we're cold calling is the fact that it's cold. I'm calling someone up out of the blue; I don't know what to say; I don't know what they're going to say. And so it begs this question: Is there something I can do to make the cold call warmer? Is there something that will make it easier for me? Joe Friedman suggests how in this cold calling tip #3...

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Cold Calling Tip #2: Why Make Cold Calls?

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The Purpose of Cold-Calling Is to Get Face-to-Face

The purpose of cold calling is simple and clear. But so often we become diverted from our objective. This is the second of several tips from Joe Friedman on how to make more effective sales calls. In the first tip, Joe highlights how prospecting is a game.

Transcript:

One of the first questions that we ask people when we’re talking about prospecting, cold calling, or introductory calls: What’s the objective? And I can tell you we normally fill a flip-chart full of people’s ideas: gain information, find out if we’re talking to the right people, maybe do some need discovery, get a meeting, have a discussion, present product ideas. It’s actually a trick question.

There’s only one objective when you’re cold calling and that objective is to get a meeting.

The real power in selling happens when you’re face-to-face. As a result of that, our objective when we’re cold calling is to do nothing more than that. And yet, frequently we get diverted: “Tell me a little bit more about your company.” By the way, if somebody says that to you, your response should be: “It will be better off if I show you.”

Remember: your objective is to get face-to-face. And that’s what you need to come back to—regardless of what they ask, what they say, and what the other person does in an attempt to divert the conversation somewhere else. You want to keep coming back to the need to be face-to-face. That’s where relationships get created.

ZEHREN♦FRIEDMAN offers a full range of selling skills courses to help you sell better.

Read more here: http://zehrenfriedman.com/skills-training/sales

Cold Calling Tip #1: Prospecting Is a Game

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About 10% of us like to make cold calls the rest of us don’t like doing it at all. You can get better at making these kinds of sales calls and they don’t have to be drudgery. This is the first of several tips from Joe Friedman on how to make your cold calling more effective.

Cold Calling Is a Game

Transcript

In this segment, I want to talk a little bit about cold calling or prospecting or making introductory calls. We don’t distinguish between any of those three. And yet it is a part of the sales process that most people really don’t like.

I would say in our experience about 10% of people that we come into contact with love prospecting. And 90% of us really don’t like it at all. We teach it. I do this as part of my job in selling. But it is not one of my favorite things on the planet to do.

Why is that?

  1. Number one, it’s hard work.
  2. There’s the amount of rejection that we all get and nobody likes that at all.
  3. People think it just doesn’t work.

Well, I can tell you depending upon the sales cycles that exist for your products, it does work. It takes time. It takes effort. And you have to look at it as a game. In most cases, the behavior that you will use when you get face to face with someone is 180 degrees different from the behavior you use when you’re prospecting or cold calling.

It is a game. You have to be tenacious. The game is cat and mouse. They are the mouse. You are the cat. Our job as sellers is to pursue those people to force our foot into the door to find a way to get face to face with them. And as a result, you have to look at prospecting as a game.

ZEHREN♦FRIEDMAN offers a full range of selling skills courses to help you sell better.

Read more here: http://zehrenfriedman.com/skills-training/sales

Joe Friedman

Joe has over 20 years experience in sales, training, and consulting. Selling and delivering training is Joe’s passion. Joe’s career path has taken him from the faculty at Northeastern Illinois University to First Chicago, to another training firm before joining his friend David (who kept calling, and calling, and calling) to form ZEHREN♦FRIEDMAN.

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Buyers Should Talk More?! Selling Is Not Telling (revisited)

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Buyers should talk more, right?

How many times have you heard the phrase, “selling is not telling?”  One of my favorites is, “Sellers ought to be seeking, not speaking.”  We’ve all gone through sales training that teaches us that, right?

For over 20 years, we’ve done an exercise at the beginning of one of our sales classes in which we tell participants:

  •  Pick something to sell

  •  Be as persuasive as possible

  •  Seller initiated call / first meeting / new buyer

  •  4 minutes long

  •  Audio record the call when you are seller

Then we pair them with another participant, give them digital audio recorders and send them off to do the exercise. When they return, we send them off with someone else’s recorder (neither theirs nor their partner’s) with a score sheet to listen and calculate two ratios—one of which is: seller talking / buyer talking.

When everyone returns, we ask the group, in this scenario, “seller initiated / first meeting / new buyer,” what percentage of the time should both parties be talking? The answers range from 20% seller / 80% buyer to 50/50. Rarely does someone say the seller should be talking more.

If we created a ratio in which both talked the same amount, for example if each spoke for two minutes, the ratio would be 2/2 or 1! If the buyer talked more, the ratio would be less than 1; if the seller talked more, the ratio would be greater than 1.

At the national sales meeting of one of our manufacturing clients, we did this exercise with 130 salespeople and sales managers. 70% of the participants in the exercise had over 7 years of selling experience.

Here’s what we found:

  • The average amount of time the seller spent talking was 72%
  • The averages amount of time the buyer spent talking was 28%

Oops!

Salespeople say, “I’d never do that,” and yet we see this kind of outcome repeated quite regularly when we do this particular exercise.

At the end of every sales class, we provide sales call planners and urge people to fill them out before calls. The natural reaction is, “I’ll use these skills.”  No you won’t! 

Apparently, the most repeated and recognized truism, “selling is not telling” is easy to say, but not so easily done. There’s one way to make sure you don’t fall into that trap:  Plan your questions in advance to turn the ratio to the buyer’s side!

 

ZEHREN♦FRIEDMAN offers a full range of selling skills courses to help you sell better.

Read more here: http://zehrenfriedman.com/skills-training/sales

 

Socratic Selling Skills: How Socrates Sold

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Questions Don’t Just Ask—They Also Tell!

It is obvious that you should use questions when you want information to flow from the other person to you. It’s less obvious, but no less true, that you can also use questions to make information or a viewpoint flow in the opposite direction—from you to the other person. Socrates used this technique of conveying information by asking questions so effectively that 2,000 years later we still refer to it as the “Socratic Method.”

Asking questions can be especially powerful when you are trying to persuade a buyer that the problem she faces is more serious than she thinks and that it warrants a solution now. Instead of telling the buyer “You have a problem here,” ask “Are you satisfied with...” or “Will you be able to compete effectively with your current equipment?” This is a good selling technique, since it allows the listener or buyer to reach the conclusion herself. Most of us like our own ideas more than those that are handed to us or imposed on us by someone else. Let the buyer think that the need for a solution is her idea, and she is more likely to buy.

Questions Can Also Help Persuade

When attempting to persuade—whether in a sales call or a social interaction—it is possible to hurt your cause by “coming on too strong.”  That’s what happens when the persuader (the seller) focuses too heavily on the product or idea and too little on the buyer and how the product or idea appears from the buyer’s perspective.

The best way to focus on the buyer is to ask questions which get the buyer to talk. There are two reasons—one psychological and one purely informational—why it´s good to get the buyer talking.

Psychological Benefit.  Your questions tell the buyer that you are concerned with his situation and his interests, and that you would like to know what he thinks and wants.  If a buyer thinks you are concerned with his needs and that you have some sympathy or at least open-mindedness for his point of view, he will share more information with you.  He will also lower his defenses and be more open to what you have to say.

Informational Benefit.  With the buyer talking and you actively listening, you are almost certain to learn something that will help you present your argument or solution most effectively.  You may learn what the buyer wants and why the buyer is or is not interested in what you are about to propose.  You may learn the buyer’s decision criteria and what objections the buyer is likely to raise to your proposal.  This information can be extremely important when you present your argument or proposal, for it allows you to appeal directly to the buyer’s specific needs, interests, and predispositions.

 

ZEHREN♦FRIEDMAN offers a full range of selling skills courses to help you sell better.

Read more here: http://zehrenfriedman.com/skills-training/sales