When your conversations with customers stall out over price, you need to redefine the benefits and values. Your offer must be more than price. Make sure your offer consists of everything that impacts the value or perceived value of your solution. Explore these three methods for overcoming price objections.

In our experience, the only people who want price to be a deciding purchasing factor is when they are pursuing the price leadership position. When companies find themselves struggling with price objections, it is often due to the lack of meaningful point of differentiation. Differentiation enables you to shift the focus to the benefits and value that demonstrate a competitive advantage. 

Overcoming pricing objections starts with understanding the value of your offer.  Once your differentiation is solid, there are three ways to redefine your conversation to overcome price objections.

Three Ways to Overcome Price Objections

Overcoming price objections takes redefining the conversation. Consider one or more of these options:

1. product scope
2. time and
3. impact

Product scope:  Product scope addresses the entire range of characteristics of the customer’s ownership experience. It enables you take the product beyond it specific attributes and features. It includes every aspect of your transaction or relationship with the customer, from the quality of the selling and service experience, delivery, implementation, payment terms, packaging, convenience, guarantees, value add consulting. This option represents an opportunity to demonstrate your  advantage(s) over the competition.

Time: For many customers time is an important dimension. The faster you can deliver your solution the faster they can realize their needs, such as their time to market, improving their customers’ experience, their ability to offset a competitive threat. Often customers wait until the problem they’re trying to address has gone from a mole hill to a mountain. You know the old adage, “time is money.”  When you save them time or accelerate their time frame to an advantage, you providing a financial benefit.  The amount of financial return often is far more valuable than the price you are asking.

Impact: Every step along the entire buying and ownership experience provides you with an opportunity to differentiate yourself. This difference is the key to premium pricing. If you haven’t it’s time to examine the entire life cycle of your customers’ experience.  Identify at least one way you add value at each stage in the life cycle. For example, in the initial implementation the quality of your training or you ability to easily adapt to their current operations and processes may be far better than a competitors. Another example may be the actual use of your solution- ease may translate into faster adoption. In the support and growth/maintenance stages, your customers may realize better benefits by using your product over a competitors.  

One you identify the benefits for each stage, redefine these in terms of their impact on the customers’ business.  For example, a lower total cost of ownership, which includes costs beyond the initial expenditure in order to ensure the solution delivers the expected results, may warrant a higher purchase price.  Total cost of ownership moves the discussion from price to how you are saving or generating money for your customers. Cost of ownership includes (but isn’t limited to) revealing how your solution lowers their total operating costs, reduces expenditures and time in various business processes, enables more productivity out of existing assets, improves top line profit, and/or increases customer volume.

Using any of these options will require you to have a complete inventory of your advantages. This allows you to position your offer correctly. With a clear understanding of the value you can deliver to the customer, you can connect each of the value elements directly to your customer’s problem.

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Make Your Offer About More than Price

A stimulus for action is the offer. Your offer is the deal.  A deal implies an exchange. A  quid pro quo. It’s what you offer up that psychologically moves the recipient to take the action you want. How to use an offer effectively depends on the purpose of your campaign.

Here’s the anatomy of a deal:

• Enjoy a a free trial; a free issue; a free report; a prize (if you win); a special, limited-time introductory price
• when YOU
• complete the enclosed order form, participate in the demo, call and schedule an appointment
• No risk, no obligation, of course.

The offer may also include a premium. A tangible item designed for instant gratification, together with the process by which your prospect can receive it now…or promptly upon payment for his/her order.

Regardless of the purpose, stating that the offer is for a limited time will often improve response along with an included order form with a self-address stamped envelope, even in these days of the Internet.  

Your content related to the product (a Special Report, a series of Case Studies, a free cost-benefit analysis, an industry study or survey, a White Paper, etc.) is often a good premium. Making the premium available for a stated time limit will often improve response, as will a yes/no option on the order form. 

When selling directly, a special gift or the promise of a big sweepstakes payout can add involvement and boost response.Extensively test your premium because premiums can make or break a lead/opportunity generation effort.

Make your premium specific and visual. The more open-ended, such as “request more information” the less tangible the premium. The lower your response and consideration rate.

The key point here is that sometimes you need to give to get. The giving enables you to keep the conversation from stalling out.

Guarantees Speak to Your Value

Whatever your offer, a guarantee is essential. The guarantee has nothing to do with the product. Rather it speaks to you and your company and the honest, fair and open manner in which you do business. It’s designed to build trust and mitigate risk. Research reveals that companies rarely get ripped off by guarantees. Most people are honest, and most business people especially are just too busy, too distracted, or too professional to spend time ripping off a mailer. Try to state your guarantee positively, such as. “Try it for 30 days without risk or obligation.” Longer guarantees, 60 days, 90 days or life-of-the-product, usually pull better than 15 or 30 days. The recipient often becomes acclimated to the product during the longer trial period, making good old human inertia work for you.

A common offer mistake is to offer a reduced rate on a second, usually related product as an inducement to purchase the primary product. For one thing, it dilutes the sell. Now the prospect has to weigh the merits of two products, not one. However, the second product almost never receives the sales push that the primary product gets. The relationship may be clear to you, but it’s rarely that clear to the prospect. To him or her, you’re simply trying to sell two products instead of one. This kind of double offer often provides the prospect with an excuse to put off the purchase decision until “later.”

If you’re conversations continue to stall, it may be time to revisit your pricing models.

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