Every sales person hates getting price objections, but the real issue with price objections is the relationship sales people have with them. At one time or another, every salesperson has heard these infamous words: "Your price is too high," or "I can get the same product a lot cheaper from someone else"

Tom Reilly, author of 10 books on selling and a nationally known sales expert who has trained more than 100,000 salespeople, recently conducted a webcast with, INDUSTRIAL DISTRIBUTION, on overcoming price objections.
Here are some statistics Reilly noted during the one-hour webcast:

 90 percent of salespeople offer a cheaper price, unprompted, to get the business
 75 percent cave in when the buyer says, "Your price is too high."
 Only 18 percent close without discounting.

Wow this is huge, huge in terms of tremendous bottom line opportunity. Think about it. If we could all improve let's say 15% in handling these types of objections what would happen to sales? They would go dramatically up.

Price objections can be very nerve-racking to sales professionals. When receiving a price objection sales professionals must realize they have not done their job of fully understanding the clients’ needs, and driving specific benefits to those needs. A true professional will practice handling price objections on a consistent basis to build confidence. A price objection is not a personal attack from the customer rather it's a cry for value.

Some research suggests handling price objections can create a significant opportunity versus the competition. Every organization receives price objections; therefore, getting better at handling price objections provides your organization with an incredible opportunity to produce better bottom-line results.

CSO Insights provides the selling industry's most valuable data in terms of trends. In one survey over 50% admitted to needing improvement in selling value and avoiding discounting. If 50% of the sales staff is discounting versus selling value, imagine the impact on the bottom line if those reps were given the proper tools to succeed.

Here is the key thing with price objections. You CANNOT respond with price when you get a price objection because one of three things happens:

1. You lower the price - Yes you may win the business but you have also de-valued your product offering
2. You keep price the same - All you are really doing here is saying no.
3. You raise the price - Well this defies logic and will never occur.

The major rule when getting a price objection is to drive value, but it requires confidence and practice to do so. Step one when getting a price objection is to never respond with a price reaction. Second, push the objection to the side knowing you must come back to it later. This can be done by saying; outside of price what are the two or three major factors that will go into your decision-making and why. This question prompts the customer to revisit or even at times discover their own value drivers. The customer will either respond with specific value drivers or potentially have an inability to quantify what they're looking for. It is at this point you have a choice of how to react. If the customer can quantify their values you can revisit how the benefits of your products and services help drive those values. If the customer cannot quantify their own values the sales process potentially needs to be restarted because the customers are only left to buy based on price.

If you must discount your price, get something in return. During this interaction you will have a choice as a sales professional. You may want to lower your price slightly, but to simply lower price can be a very dangerous proposition. Always get something in return or you have created a perception of your self and your firm you may never be able to change. If you get something in return, say 5 warm leads, you are not viewed as simply lowering price, rather you are viewed as having worked together with your client.

Summary

Price objections are tough because sales reps will typically want to lower the price due to the fear of losing the customer. Handling price objections takes time and continuous practice to build up the nerve as well as skill sets to handle such situations. Management cannot simply tell salespeople what to do; rather it must facilitate practice sessions to help build confidence in handling price objections.

Source: Tim Hagen link