In the last newsletter, we examined some ways to handle the “pre-objection to price,” which is a tactic customers will use to try to reduce your price before you’ve even had a chance to get in the door. Now let’s take at ways and words to overcome the infamous “Your price is too high” objection.
When a customer says “Your price is too high,” consider these strategies:
• Payment versus price. “I’m glad you mentioned price. That’s really the best part about buying from us. We’ll put the purchase price into small installment payments, so your actual investment per month will probably be lower than what you spend now in energy costs and repairs.”
• Quality versus cheapness. “Have you ever figured the price of not having high quality? The price of breakdowns, the cost of wasted time, the phone calls, the headaches, and the repair bills. High quality actually saves you money in the end. When would be the best time to start saving that money?”
• Initial price and value elevation. Begin by quoting a price that’s very high, and then gradually build your value to match or exceed that price. This will make your actual price sound far more reasonable.
For example, say, “Your new system – outfitted the way you want it, will probably run to $6,000 or a little more.” Then, as you continue expounding upon each item of value, the customer is beginning to see how it might well go past $6,000.
When you present the proposal, say, “Well, with everything figured in and the way I saw we could wisely save you some money, your system total is just $5,280.”
You may not have to deal with price, negotiations, or any “thinking about it” after this.
Also, people want things that are out of their reach. So your high initial price will “raise” their thinking about price and will cause them to value the item more highly. When you present it as within their reach, it becomes almost irresistible.
• Emphasize benefits. When customers reject your offer based on price, they’re only taking money into consideration. There’s a lot more to the purchase, and you must make that clear for the customer. You’ve got to believe in your own mind “For what we do, we’re the cheapest in town.” Be able to spell out the benefits of doing business with your company. By doing so, you’re helping your customer organize his thoughts so he can make the right decision.
• Make it look difficult. If customers balk at the high price, explain that this is the price at which you have been selling the item for some time, and anything lower would be the rare exception and very difficult.
You may even quote neighborhood houses that have similarly priced systems. (This may put a little guilt into their “cheapness gene.”) This is for those times when you’re pretty sure that the balk was staged or just a little “smoke” from the customer to see if you’d negotiate. Staying firm is the tactic to use here.
• Speak only in terms of “difference.” Do not ever speak as the full price of your system versus the most they’ll pay; only refer to the difference.
For example, let’s say your system is $6,000 and the customer only wants to pay $5,200.
So you never even mention “six thousand dollars” again, but that “We’re only eight hundred apart.” Then begin to focus on increasing the value by more than the difference, or by taking out things to equal the difference.
Reduce to minimal terms. Using the above example, “Your payment on the eight hundred is less than $17 a month. You’ll save more in energy than that.”
Or, “You’d spend more than that on repairs to your old, energy-wasting system. But your new system comes with our 5-year parts and labor warranty, so any and all repairs are free during that time.”
Or, “Over the 10 year system life, $800 just over $6 a month, which is about 21 cents a day. Isn’t it worth getting what you want for 21 cents a day?”
• Use visual aids. Place your right hand about a foot in front of you at eye level, palm down. Call that the fair market value of what you're offering. Then place your left hand about six inches below your right. Say, “If you offer me this, and I try to get you up here (move your left hand up so that it is now six inches above your right hand), shame on me.” Return your left hand to its original position and say, “But if you offer me this and I bring us closer to an even playing field (move your left hand so that it is even with the right), does this sound fair?” This builds credibility and moves you ahead dramatically in the negotiation process.
In our next installment, we’ll look at ways to handle customers who use the classic line, “Let me think it over”
Adams Hudson is president of Hudson, Ink, a creative marketing firm for contractors. Readers can get a free marketing newsletter and a free 16-page report called “Get More Leads in Less Time” by faxing their letterhead with the request to 334/262-1115 or emailing to email@example.com. You can also call Hudson, Ink at 800/489-9099 for help or visit www.hudsonink.com for other free marketing articles and reports.