“You’re too expensive”
by Krauthammer blog, on Aug 24, 2020 12:11:27 PM
If you’re in B2B sales, you know that objections are normal and are even raised by prospects who are interested in buying from you. Therefore, you should never see them as a door slammed in your face or as a final “no”. The key lies in uncovering why your prospect or customer is objecting so that you can move forward in a mutually beneficial way. We’ve collected the most common sales objections to show you how to move past them by keeping the focus on value:
1. “You’re too expensive”
This is the number one sales objection. When you hear it, you know that you haven’t properly communicated your value proposition. So go back to the value of your solution and make your prospect understand the benefits he’ll get: increased productivity, higher operational excellence, better margins - whatever the specific value is, make it clear that it’s worth the price. So discuss your prospect’s current situation and demonstrate the ROI of your solution and how it helps your prospect to reach their goals.
You can also ask questions like "What ROI are you looking for?" or "How much will it cost you to do nothing?" This makes them think about the bigger picture and helps reveal the hidden costs of the status quo. Your prospect moves away from thinking in terms of "expensive" or "cheap" and focuses on the long-term value for their business. It can also be helpful to have an ROI calculator ready. In many companies, budgets are flexible for initiatives with justified positive results.
Objection: “We’re impressed by your company, but your offer is too expensive. It’s more than we budgeted.”
Response: “We know this is an investment. However, you should consider the long-term positive results. Let me show you what positive changes our solution will bring for you and how much you will actually save over the next year by using it.”
2. “Your competitor is cheaper”
This objection is often a negotiation tactic to get a lower price. To overcome it, you have two choices: differentiate yourself or reduce your price. While offering discounts has its place in the sales process, be careful not to do it too easily as it makes you vulnerable to further price falls. Besides, it lowers your margins and reduces your product’s value. One thing to remember in B2B sales is that prospects are often more value sensitive than price sensitive, and they will pay more if they’re convinced that your product is demonstrably better than the competition. Therefore, you need to reassure the prospect by showing them why your solution is superior. You can differentiate by focusing on several aspects such as quality, innovation, convenience, strategic or existing relationships. Make it clear how your solution will further increase the ROI they will receive.
Objection: “We have a similar offer from a competitor at a lower price.”
Response: “Let’s talk about some of the reasons our solution might have a higher price. Our price is composed of xxx and includes xxx. We actually offer you xxx which will help you with xxx.”
3. “I don’t have the buy-in of my senior management”
If you sell complex solutions, you need to involve multiple stakeholders in the buying process. Even if you’re working directly with an executive, she might not be able to make the purchase decision on her own. To overcome the buy-in objection, you have to do two things:
1. Identify who holds the decision-making power. Find out who they are and ask for an introduction to sell directly to them with the help of your first contact. You can also ask which departments are affected by the problems you’re looking to solve.
2. The next step is to “educate” all stakeholders involved. Treat each person as your main contact and ensure that everyone understands why he or she needs your solution and why it’s worth the cost. To make the senior management sign off, they need to understand where their money is going and what they’ll get in return. This may require selling a different “value set” to each stakeholder.
Objection: “I need the approval of our senior management team to move forward with your proposal.”
Response: “Could you introduce me to your management team so that I can talk to them and get a better understanding of their perspective and value set.”
4. “We already work with company XY”
This is a common objection in the prospecting phase. Therefore, it’s very important that you can clearly explain why you’re unique and what value you bring. Your prospect just heard, “We help you with X” and thinks, “We have already a partner for that.” So you need to change their mindset, and explain why they need the specific value you provide. Customer testimonials, case studies and active references are extremely effective for this because your prospect can relate to someone who was in a similar position to him.
Objection: “We’re already working with company Alpha.“
Response: “We’d like to show you how we’re different and provide additional value to our customers. We can present some cases of other companies like yours who work with us. Let me just share a case study that shows how a company in your industry was able to increase their productivity rate by 10 % by working with us.”
“It never hurts to benchmark. If you allow me 30 minutes to investigate your service offer with Alpha, I’ll compare it to our offer. If we can make you a better offer, you will benefit. If not, you have the confirmation that you have a great deal with Alpha. It’ll only cost you 30 minutes”.
5. Call me back next quarter
Prospects might try to dissuade you from having a conversation because they’re busy. They might ask you to follow up in a few months. To overcome the time objection, you can propose to set up a “five minute exploratory call” as soon as possible. Meanwhile, uncover why your prospect wants to wait. Is he waiting for a bigger budget or is he postponing? Show him what he could gain over the course of those few months and inspire him to make the change sooner.
Another approach to handle this objection is to discuss fact-based research that discusses changes in their industry. Your goal should be to convince them to make changes quickly to remain competitive.
Objection: “Could you follow-up in quarter 2?”
Response: “I’m happy to do that. However, I’d like to set up a five-minute call to show you what we’re doing and how we might help. That way, if it’s interesting for you, we’ll have more to talk about in the second quarter. When is a good day for us to talk?"
To handle sales objections successfully, you have to understand what’s behind your prospect’s objection. If you understand what your prospect wants and needs, you can work on overcoming objections based on budget, authority, need, time, and value. Many objections can be overcome by building credibility, trust, and by re-framing the way your prospect sees what you’re selling.