Dealing Successfully With Price Objections

Few people really enjoy negotiation.

Most prefer the discussion of issues that precede negotiation, or the implementation that follows a successful outcome. It’s almost a relief when the pricing conversation is over.

The discomfort is made worse when the client disputes the price.  There are five common objections that we all encounter. So why not be prepared for them? If countered successfully, this may be the final hurdle to overcome before winning the business. Most clients make at least one effort to test the price.

1. “We need to think it over”

2.  “Now is not the ideal time; we need to do [xyz] first”

3. “It’s too expensive; we don’t have a budget for that”

4.  “It needs to be approved by someone else”

5. “We have other suppliers to see”

The first thing to do is to hear out all the objections. “Apart from the timing, is there anything else of concern to you?”  Don’t rush to answer their points – doing so smacks of desperation. Find out what they liked. If they object on every count, it may be worth walking away.

The second thing to do is to befriend their concern. This does not mean you have to agree with them – “Many people / businesses have been concerned about the size of the investment. What they have found in practice however is that ….”

From there on, you will have to deal with the specific objection. Let’s start with the dreaded “We need to think it over”; which can give rise to lots of frustration.

Many managers are more terrified of making a wrong decision than they are by letting even a bad situation slide. With analytical types in particular, you want to get invited into the decision-making process. If they trust you, and if you are not too pushy, they may involve you and others as a means of minimising the risk to themselves.

“Sure, you need to think it over. Nobody invests this sum on the spur of the moment. When you take a preliminary look at the pluses and minuses, what do you see?”

“Who else will you involve in the thinking? Should we have a meeting so that everyone can share the responsibility for the decision?”

“Will you still be using the criteria we established at the outset? (Recap them here). Is there any new criteria to be taken into account?”

“In the light of the €xxx per week benefits (agreed earlier), what is a reasonable timeframe in which to make the decision?”  (More on this next time, when we discuss timing objections.)

As you will see from these sample responses, it is vital not to start a relationship by quoting a fee (eg. your standard rate per day) before exploring value. We are occasionally pushed to do so, and it is important to NEVER answer this question until we have ascertained the value being delivered.  “I don’t know yet … anything between €500 and €50,000: it all depends on what needs to be done. Can we talk about that first?”

It might be helpful to remember that objections are frequently a buying signal. At the very least, they are an opportunity to hone a vital consulting skill.