Overcoming Price Objections

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My friend Ajay is taking a beating in India, over pricing. It seems that his clients are prejudiced: they always make the discussion about price. Here are some suggestions to help change the pricing game…

Look at your watch. (Did you do it? Thanks.)

breitling-chronomat.  Cool watch!Is that the least expensive watch on the market today? It isn’t? **What?** It’s not the cheapest you could find? I am [almost but not really] shocked. Why not buy an inexpensive watch – – when every watch tells you the time, shouldn’t you wear the cheapest one you can find?  Some folks don’t even wear a watch… and why should you, when the time is all around us (just look at the corner of your monitor, or on your phone!)

So, let’s set your watch aside, and apply this line of questioning to your cell phone, your car…or your address…

Here’s my point:

I don’t claim any expertise over the market in India, but I do know a lot about buyer behavior. The only antidote to prejudiced pricing discussions is value.

What does your customer value most?

Why do you value your watch (cell phone, car, etc.)? Quality? Reliability? Or are there some intangibles – the way it makes you feel? The fact is that our personal purchases are driven by both fact and emotion.
Which side wins can change depending on a number of factors, but both fact and emotion impact a purchase decision (any purchase decision).
You have to consider the personality of the company you are selling into, (Are they heartless, cheap, and drive a hard bargain? OK, gotcha. So, What corporate needs are driving these descriptions?)

These needs may include:

  • competitive advantage (real, or perceived?)
  • a need for greater understanding of the ROI on a particular solution
  • cost-cutting
  • profitability, or perhaps
  • a sincere desire to make you squirm

Only you can fill in the blanks with specifics from your customer. Qualifying their objections, and separating the truth from the drama is the subject of another post. But money – pricing – is only part of the value equation. The other part is what a particular product means to the company. Another way to say this: What is the value of your brand?

Individuals run companies, individuals make buying decisions, individuals have emotional needs (as well as financial). While the budget may be fixed, my take on any discussion about pricing would include a thorough understanding of the puts/takes of the emotional appeal of your solution.

Even cost-cutting measures are driven by both facts…and emotions. If you say, “there is no emotional appeal to our solution” then I would respectfully reply, “you haven’t thought this all the way through”.

And for the record, you have a very nice watch! 😉

 

What are your thoughts about selling into a severe price objection? How have you handled price sensitivity in the past, and why?

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