Meeting Price Objections from Trust
When the customer says, “I don’t know, that sounds kind of high to me…” what do you do? How does Trust-based Selling™ handle customers’ concerns regarding price?
First, note the sales jargon for this situation—it gets called “objection handling.” The wording is revealing. It suggests we have a conflict with our customer, an oppositional situation—their side is objecting to our side. And our job is to “handle” it. Kind of like a counter-move in wrestling.
But what if you’re trying to create a trust-based relationship with a customer? In that case, this isn’t about “objections,” much less “handling” them. Instead, it’s about a mutual inquiry as to whether joint value can be created—or not. Price is—at bare minimum—a simple and necessary part of the discussion.
But much more importantly, when we hear price comments as “objections,” we immediately jump to a place of high self-orientation—the trust-destroying denominator in the trust equation. Omigosh, they’re pushing back against me—I’ve got to counter-attack.
Thought one in responding from trust—it’s not about you. In fact, it’s never about you. It’s always about the customer. What looks like a threatening price objection is actually a great opportunity to learn something important about a customer, and a chance to add value right in the sales process itself. Here’s why.
Most price “objections” are simply expressions of dismay or concern—feelings—on the part of the customer. Most fall into five categories. Helping the customer identify these feelings and these categories is a positive help in and of itself. The actual words spoken can be identical: “— that sounds kind of high to me.” But they mask very different meanings:
The categories are:
1. Naïve. Uh oh, that’s way bigger than I thought. Subtext: "I feel ashamed; I didn’t understand what was involved in buying this product/service before talking to this person."
2. Out of Date. That’s more than we can afford. Subtext: "I feel embarrassed—I invited this person in thinking we could do it in this year’s budget. Now I see that won’t work."
3. Engineer. Wait a minute, I don’t see why it should be that much. Subtext: "That doesn’t make sense—they must be quoting me the fully-loaded version, let’s reverse engineer it."
4. Comparison Shopper. Hey wait—how do I know you’re not screwing me? Subtext: "I want to get a good deal, maybe not the best, but in the top half, so I need to know the real prices."
5. Bazaar Lover. Aha, the game is on! Subtext: "I don’t care what you quote me, I’m going to get 20% off! I love this part of the buying process!"
Each of these subtexts requires a very different response. The good news is—the responses are obvious. All we have to do as the seller is to ask! Ask the buyer what’s behind their words; what kind of concern are they expressing when they say, “I don’t know, sounds a little high to me.” What are they feeling?
Our job is simply to explain that all reasons are valid, and that we simply need to know which is operative here. Simply by stating them for what they are, buyers one and two feel relieved of their shame and embarrassment. And while this transaction won’t happen, you just vastly increased the odds of them buying from you in the future.
Number three becomes a simple job of itemizing features and costs—as long as we are not attached to the margin on every little feature. An easy sale.
Number four is solved by the willingness to be transparent, within the bounds of what’s legal. Another easy sale—as long as your price is fair.
Number five just wants to have fun. So build in a little upside, and be prepared to give a little more up; and enjoy yourself along with the buyer.
This is not about “handling objections.” It is about using curiosity and customer focus to build relationships. The profits follow—as long as we remember we’re supposed to be on the same side of the table as our customer, and in a relationship that is the sum of multiple transactions.
It’s a rare day when I disagree with Charlie Green … and it happens sometimes! I’d like to hear more about your thoughts behind your solution to #5, the Bazaar Lover. The hair on the back of my neck goes up when I read "build in a little upside." Isn’t that hidden padding one of the very reasons our clients have come to distrust us and our price estimates in the first place? I’m happy to look at ways to reduce price by reducing scope, offering volume discounts, telling them all our clients get 5% off for paying in full up-front — you get the idea. But building in upside so I can play the negotiating game? I’m not sure sure about that one …
Well I will stand at least partially corrected.
I once had a meddlesome boss who drove me nuts. Someone told me, "just leave something partially done, so that he can enjoy fixing it–because he’s going to fix something, the only question is what.
What I should have said was something like "build in a little upside in the design or quality or features that the customer can then remove, or otherwise alter, thus allowing some room for the customer to positively affect the product-price package you have presented, since it appears that’s what they really want–to affect the offering. So let them."
I should not have left tmy comment so vague; I agree with Andrea that automatic, across-the-board price-padding is a no-no, and welcome the correction.
Charlie and Andrea, I’m reading some of your older posts tonight and came across this one.
As far as #5 goes, the “right” answer may be partly cultural.
In Japan (at least when I worked there), tiered pricing is the norm, where customers in different relationships with a business expect to receive varying discounts off the “sticker” price.
I like your answer, Charlie, and I think it’s very good advice for doing business in North America.
And in my experience, your mileage may vary in other countries.