Price Objection | Why is it always a Sales Obstacle
In the world of traditional selling the fee always seems to be too high. Even if your service or product is superior, prospects still commoditize it in order to make it an issue. Why is the price objection such a common occurrence?
Reasons for Price Objections Day one on the job ! What type of training do new sales people receive? Product knowledge training! We create experts out of them. However, they are experts at who you are, what you do, and what you have done for others. Or, are they experts at knowing why the prospect is going to buy and why they are going to buy from you? In the end which really matters most?
Typically sales people barrage the prospect with who they are, what they do and how much better they are. In other words it is strictly “I” Centric.
Answer the following question—what is the reason you buy something? You buy for YOUR reasons, not the sales person’s reasons!
How the Needs Analysis Backfires Many of you have either experienced, or at least know of sales processes out in the market place. Without naming sales training systems by name, let’s say that many have the same thing in common. They all teach you to do a Needs Analysis, followed by spinning solutions to better fit the identified needs. But what does your solution consists of—features and benefits! When you go in to identify your prospect’s needs, so does your competition! Then you begin to spin your solution. Subsequently, your splendid delivery of intellect results in your prospect wanting to think about it.
We then do something unique; we double up on intellect. That’s right, we march back to the office and write a long, boring proposal. Let’s give the prospect something to really think about! We are not implying that proposals shouldn’t be written. However criteria must be in place before you you write the proposal.
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Case Study: Recently we were brought into a well established engineering company because the Business Owner claimed that his managers were writing too many proposals—ten new proposals per month.
We asked “what’s the problem”? He told us that these proposals were technical and take two weeks to complete, resulting in a price of $10,000 per proposal! The worst part was that the company only had a 10% closing ration. Therefore each account cost $100,000. When asked what criteria existed that merited the proposal—what information beyond needs was obtained that allowed them to target the prospects desires—he had no idea. Generally, engineers are analytical and as such comfortable writing proposals. When we met the engineers we posed the same question. Their response was “they ask for it” . We worked further with this organization however one component of what was implemented made a major difference. We implemented the “Six Rules of Writing a Proposal”. These engineers were no longer writing ten new proposals per month, they are writing six, freeing up time to develop new business. They are no longer closing ten percent; they now close two out of six: 33%. They more than tripled their closing ratio and became 40% more effective with their time. This one component was a key factor in increasing sales productivity.
Your prospect tells you that they “Want to think about it”, when in fact what they are really saying is that they want time to compare! Hence, what becomes the differentiating factor in the eyes of the prospect? The Fee!
Now here comes the second wave, if the first is not bad enough. Your prospect now begins to ask questions. How are you going to handle problem x, y or z. Tell me how you intend to deal with…..? You know, I think I am going to have to check you out! In fact, I think I am going to need some references! Now the burden has shifted to you. Where is the focus, on their problems, or on you, your features and benefits and how you would handle their hypothetical problems? These questions are not bad questions. You see, if you are not hearing these questions chances are you are not even in the game. These questions are actually being asked by the prospect to de-commoditize you—a condition you never should have caused!