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25 TOUGHEST Sales Objections (and How to Overcome Them)
Surefire Techniques for Conquering Any Resistance and Closing the Deal
By Stephan Schiffman The McGraw-Hill Companies, Inc.
Copyright © 2011Stephan Schiffman
All rights reserved.
ISBN: 978-0-07-177344-7
Excerpt
CHAPTER 1
GIVE ME A BETTER PRICE
In the introduction, I talked a bit about the price objection. Now we're ready for a more detailed discussion. I'm putting this chapter first in the book because it's among the most common objections you'll run into.
For the most part, overcoming this one is a matter of determining what precisely the client wants. Some objections are roadblocks. They're intended to stop your discussion in its tracks, and before you can go on, you've got to figure out a way around them or through them. Others, like the one I'll discuss in this chapter, are just bumps in the road. The problem is that sometimes salespeople let them become roadblocks.
Pricing is something that comes up in virtually every sales call, because it's the most obvious point. You should go into the call with the assumption that your lead is not going to want to pay what you're asking and that she or he is going to push back.
THE MISUSE OF DISCOUNTING
Many people think that a negotiation is fundamentally about price. It isn't, of course; that's just one of many factors. But price is the one that springs to most people's minds.
The biggest mistake that salespeople make when confronted with the price objection is to assume that the answer is to discount immediately. It's almost an instinct for some people. And in doing so, they give away far more than they should. For instance, consider the following dialogue:
Client: The price you've named is too high.
Salesperson: Okay, how about if we talk about a 10 percent discount? In fact, we could probably do a bit better than that if you need us to.
Client: [says nothing]
Salesperson: Well, I recognize that this is a bit high, and you're a favored customer. So we could do a 15 percent discount. Would that work?
Client: [says nothing]
Salesperson: All right. I'll go back to my boss and see if we can commit to a 20 percent discount. How does that sound?
Client: Fine.
There are several things to take note of in this exchange:
1. The client, by saying almost nothing, has gotten a discount of at least 15 percent and quite possibly 20 percent.
2. The proportion of talking between client and salesperson is skewed the wrong way. The salesperson is doing about 80 percent of the talking instead of 80 percent of the listening.
3. The salesperson assumes that price is the only thing that matters to the client.
4. The salesperson assumes that the only leverage he has is to discount.
5. The client hasn't had to give up anything to get the discount. In fact, she hasn't been asked for anything. The salesperson is so anxious to land the sale that he's discounting as a strategy.
This is the biggest error in this scenario: discounting isn't a strategy. It's a tactic—something that should be done to achieve a particular end. In this case, discounting is legitimate if it leads to the client making concessions in some other part of the sale. Otherwise, it's just giving away money.
Several years ago, I was training for a corporation. After watching a group of its salespeople make cold calls for a morning, I called a meeting of the executives. "Do you realize," I said, "that all your salespeople are routinely discounting 10 to 20 percent?"
Silence.
"Why are you giving away 20 percent at the start of the call?"
Silence.
Everyone looked sheepish, and then someone from the back of the room piped up with, "Well, even with a 20 percent discount, they're still making the sales."
"Sure," I replied. "But you're leaving money on the table. In fact, you're not just leaving it on the table, you're pushing it over to the client and asking him to take it away from you. Why would you do that?"
No one could give me a good answer. And I began to realize that for them, the act of making the sale was more important than the content of the sale itself. That is an attitude that in the long run is going to lose a company money.
By not focusing on the terms of the sale but instead simply discounting in order to persuade the lead to buy, the salesperson is giving up things that he doesn't need to and creating an atmosphere in which he can't help but lose to the client. Moreover, doing so sets a dangerous precedent—the next time he comes back to make another pitch, the client will expect an automatic discount. To make his new offer attractive, the salesperson will have to discount even more than the previous time. And so the vicious cycle goes on until the salesperson realizes that his commission has disappeared with a loud "pop!"
The salesperson in this instance assumed that the client only cared about price, so logically (from his point of view), the only strategy to counter this objection was to start discounting. In fact, price is one of a large number of factors that matter to the client. Ironically, it's the one most removed from the salesperson's control. After all, as a member of the sales staff you don't set the product's price. That's done by executives who are concerned about the company's bottom line. So when you come to negotiate price, you're dealing with something in which you don't have a big stake. Not only that, you may not even know all the considerations that went into determining that price.
What You Should Keep in Mind about Price
Going into a sales call, here are the main things you should know about the price of your product or service:
1. How does it compare to similar products or services offered throughout the industry?
2. What was the last price your client paid for this product or service?
3. Was that price set by your company or by a competitor?
4. Has the price for this product or service been rising or falling?
5. What are the consequences to the client if you can't clinch the sale?
Knowledge of these points will help you know how genuine the objection is and how hard you can push back against it.
WHAT'S IT REALLY ABOUT?
Another big mistake of our salesperson in the previous scenario was to assume that because the client raised the point about price, that is really the central problem the client is concerned about.
Sometimes the objection is clearly about price. But other times it's a factor that conceals another aspect of the product that the client doesn't want to talk about. The salesperson has to find a lever to push open the door and see what's behind it.
For example:
Client: I appreciate your comments, and I'm impressed with what you've shown me, but I have to tell you that unit price is a big issue for us.
Salesperson: I see. Would you give me an idea of the kind of range you had in mind?
Client: Well, we were thinking of something between 40 cents and 42 cents a unit, but ...
Salesperson: That's certainly a point for discussion.
Client: To tell you the truth, I'm not sure that even at that price the product would be the right one for us.
Salesperson: Would you explain?
Client: What we're looking for is something that has a more flexible range of functions. Of course, that would mean an increased price, and I know that that puts it out of range with your product.
Salesperson: I see. So what you're looking for is a product that can do more but i
(Continues...)
Excerpted from 25 TOUGHEST Sales Objections (and How to Overcome Them) by Stephan Schiffman. Copyright © 2011 by Stephan Schiffman. Excerpted by permission of The McGraw-Hill Companies, Inc..
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