How many times have you heard that from a buyer? What do you say?
I'm Jim Pancero. In the last 33 years I've consulted and trained over 600 experienced sales teams in 80 different industries.
Dealing with pricing demands and pressures from buyers is a constant in all industries…whether you're in retail or business-to-business sales…selling large equipment… parts distribution…or services.
I've personally rode with and observed over a thousand customer calls with sales reps…both rookies and experienced pros. The reps with the best…and ultimately successful responses to "Your price is too high" consistently follow a simple 7 stepped response.
Discussing how to best respond to a buyer's "High price" challenge is like teaching you the steps of a golf swing. Even though the actual swing takes just a few seconds…we can improve your swing if we deconstruct…analyze…discuss and help you plan the best outcome for each component step.
Step 1 - Don't flinch
So…the very first step to defend your price…is don't flinch.
The goal of any buyer's negotiation attack…such as "Your price is too high"… is to throw you off balance…to get a reaction…to put you on the defensive…and to expose your weaknesses.
Your first visual reaction to their price punch immediately communicates the strength…or flexibility of your pricing position. Which response best communicates you're comfortable holding your prices?
Your success holding your prices will be directly tied to how calm and professional you can remain through this entire process. Any sign of concern…fear…or frustration will just encourage your buyer to keep pushing for additional concessions.
You need to communicate both verbally…and with your body language…that you have higher prices for a reason…now you just need to prove those reasons.
Step 2 - Ask questions
Your second step …is to immediately respond to any "Your price is too high" challenge with questions. Your first question needs to ask…"By how much? How much am I too high by?"
You can't defend against a vague pricing challenge…so your first question needs to identify the price gap your buyer believes exists…and to collect and quantify as much information as possible to justify your higher priced…but lower total cost solution.
It's never just about price
To successfully defend your higher prices we need to first make sure you're comfortable… that no matter what you sell… equipment… products… or services… you're not in a price driven market.
Markets aren't price driven…their value driven. When you prove a higher value…your buyer will pay a higher price to get it.
The best way to defend against your buyer's "high price" challenge is to shift the conversation away from price and onto the differences in value between you and the lower priced competitor being used against you.
Ask for a copy of the bid or proposal you're being unfavorably compared to. The reality of negotiating with buyers…just like the reality of playing poker…is you can't trust…nor can you usually tell the difference between a buyer bluffing as a negotiating trick and a true concern for what they see as much higher prices.
You need to be asking questions to identify if the cheaper proposal is even the same type or level of product. Are the volumes the same? Does it include all of the extras you proposed?
Step 3 - Know your enemy
Your third step to defending price needs to happen before you even get in front of your buyers. To hold prices you'll need to first know the details of your competitor's prices and discount strategies compared to yours.
Your goal with this third step is to know enough about your competitors pricing and discounting strategies to immediately know there's no way your competitors could give that low a price…or you know the two proposals can't be covering the same things.
Build a history of how your competitors bid…and then later discount to win business. Work as a team to build a list of the best questions to ask buyers…to help you identify specific competitive weakness areas.
Step 4 - Defend value
Look how well you've done so far…even though your buyer said "Your price is too high"… you kept your cool…you didn't flinch and immediately asked "How much is it too high by?" You kept asking questions and were able to identify a number of competitive weaknesses you want to discuss.
It's now time for step 4…Showtime! It's time to explain and defend your pricing and value. After all…if you can prove you’re a lower total cost…you don't have to drop your price to win the business.
Focus on what they're buying…not on what you're selling. Don't talk about what you and your team have or can do…instead…focus on the unique benefits your buyer receives because of what you have or can do.
Instead of talking about your multiple locations…talk about how much backup your team can provide…because you have multiple locations. Lead with the benefit…and then support with your features or facts.
Defending your value isn't just about presenting…it needs to be an interactive conversation. As you explain your benefits to your buyer…keep asking for feedback or reactions to help understand what benefits are of most value to your buyer.
You don't have much time to present all the reasons you're so unique. You need to always be prepared with your best two or three "lower total cost" responses. What's on your list of why it's worth paying your higher price?
Step 5 - Gain commitment
Now that you've presented why you're worth your prices…your next step is to close…to ask for the order…to gain feedback…or even a commitment from your buyer.
The commitment might not be to buy…it might be just agreeing to continue talking.
Some of the best closing commitment questions are…
"What do you want to do now?"
"Does this explain my price difference?"
"Are we now even within range?"
“If you'd share the other proposal I can do additional research to identify our differences."
Asking for a commitment is one of the best ways to identify if your buyer wants help…wants a better deal…or wants you to go away.
But the close…asking for the order…as important as it is…isn't the final persuasive step here. Gaining a commitment from your buyer is important… but an even more critical goal…is Step 6…Keep the door open.
Step 6 - Keep door open
Selling is a process…not an event. The most critical goal of selling is to stay connected with your buyer…to keep them engaged and talking. As long as your buyer's talking… you still have a chance for a sale.
What's your reason…or excuse to need to keep talking?…to continue your connection with your buyer before they make a decision?
Before we discuss our final defensive step…have you noticed?...the best response to a buyer saying "Your price is too high"…is to just follow the steps of a sales call…lowering resistance…asking questions…presenting…closing and finally agreeing to your next contact.
Step 7 - Now fix this
Our final step 7 is meant to improve your selling process. Don't just think how this price defense can help you survive your next price challenge with a great answer…that's short term thinking.
Your buyer said "Your price is too high" because they didn't see enough competitive difference to justify paying anything more than the cheapest price. It's your job as a sales pro to communicate your value.
What can you learn from this buyer challenge? How can you improve your sales presentation…to better explain to your next buyer why you're the best…and lowest total cost alternative?
It's your job to work with your team to strengthen your selling message and positioning so your buyer starts telling your competitors "Your price is too high."
Call…if you'd like to talk more about how your team can improve their defense to your buyer's "Price is too high" challenge.
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After all…we know you and your team are good…now the only question is…are you good enough to get better?
Thanks for watching…I look forward to talking with you.