Here's a scenario we've all faced: You attempt to close a sale, and the customer responds that your price is too high. Now what?
First, determine whether the customer is presenting you with the price objection or the price complaint.
What's the difference? The price objection means, in a nutshell, that the customer is going to invest in the product or service, but will more than likely buy it from someone they feel is offering it at a lower price.
Then there are people who will always complain about having to spend any money, regardless of whether or not they're getting a good deal. That's the price complaint. The price complaint is easier than the price objection.
Price complainers are usually satisfied with:
- Your offering a sympathetic ear
- An indication of understanding and agreement on your part that it's painful to have to deal with unexpected and unwanted expenses
- Reassurance that they're making the right decision
- A hope for a better tomorrow.
Here are some highly effective and easy-to-learn responses I use when customers first start complaining about have to spend money.
The Compassionate Response
Sometimes, when you quote a price, instead of staying on topic and responding directly for your request for a decision, customers launch into a rather depressing list of everything bad that's happened to them over the past few years.
They might say something like, "Everything always happens to me at once. First the roof started leaking on me, then the stove quit working. My son-in-law has been arrested, my refrigerator's giving my trouble, my cancer's kicking up on me, my juicer's broken and the dog just died. Now this."
What are you going to say? Why not just be a human being and tell them the truth?
Try this: "I know it's a lot of money, and I'm sorry that this happened to you, but on the bright side, once I'm done (working on it), it will be running a lot better than it has in a long time (or, in the case of a replacement sale, "you can put all your service problems behind you"), and as long as you keep it maintained, you can avoid a lot of expenses like this in the future."
As you can see, this response does indeed provide them with everything listed in the bullet points above.
The vast majority of the time, the conversation ends right there, and they make a decision to buy. Occasionally, however, customers need a little more time and reassurance. In these cases, you go on to the next response.
The Commiseration Response
Misery loves company, so commiserate with customers.
"I know it's expensive. It's expensive to own a home with central plumbing, electricity, heating and air conditioning. It's expensive to run a service company. We've got all these trucks that use all this gas and have to carry all kinds of insurance and all kinds of parts. Our expenses just keep going up and up. We do everything in our power to keep our overhead as low as possible to keep our prices down, but yes, it's expensive."
Beware of the question, "What is your hourly rate?" That question is a veiled price objection or complaint waiting to happen. When customers ask what you're charging by the hour, again, just tell them the truth.
"We got away from charging by the hour. We felt it was unfair to our customers. When you charge by the hour, different customers pay different prices for the exact same work done by the exact same tech, and a tech can work slower on some days than on others. Then you've got some people who hold a stopwatch to you and won't let you take your time so you can do an excellent job and double-check your work without them thinking you're padding the bill. So we sat down and decided on a set price for everything we do that would allow us to provide reasonable rates while maintaining our level of service, and that's how we came up with our prices."
"How long will this take?" This question is a set-up for an "ambush" price objection. Customers who ask this question are waiting for you to give them an amount of time, do the math in their heads, then say, "Why, that's $600 an hour. Doctors don't make that much!"
If pressed, I will give them a timeframe, but only if I can't avoid doing so. I feel it's better to provide them with a response that offers a little reassurance as well. I say, "I do this every day, so if things go well, not very long."
You know that if you work what customers consider to be "too fast," this comment can also come up after the work is completed. A way to circumvent that from occurring is to use the longer version, which is, "If things go well, disappointingly little time. I hope you won't penalize me for having done this before."
Be careful not to deliver this response in a sarcastic tone of voice. That's not what you want to do. What you're really trying to do is make them realize that they've got an experienced, efficient professional there.
Repeat the Objection in the Form of a Question
As long as the customer is actively involved in the conversation, you're still in the game.
You don't sell by giving information (talking). You sell by gaining information (listening).
Usually, the more talking customers do, the easier they are to close. When you get really good at listening, you'll learn that most people will tell you exactly how to close them.
When they say, "Your price is too high," repeat the objection to them in the form of a question. Ask, "My price is too high?" then remain absolutely silent. The whole key to this technique is not the question itself; it's your silence after asking it.
When two people are together, one of them must be talking. If you're quiet, they'll start talking, and what they'll usually do is start free associating.
One of three things will happen:
- They'll talk themselves into buying
- They won't talk themselves into buying, but they will tell you what needs to be said or done on your part for them to buy
- The whole technique falls flat on its face and you have to go on to the next one.
Seek a Smaller Commitment
You've quoted more than the bare minimum. Certain things need to be done immediately, while other things can be put off for the time being.
A good salesman never goes for a close without some lower-cost alternate offer in mind.
Taking that into consideration, you can ask, "How much money did you want to spend today?"
They'll respond with, "As little as possible."
Say, "Give me a number."
They'll respond with a ridiculously low number, which is fine. If you've quoted more tasks than the bare minimum, you can take a few off and probably be able to conduct business.
Without saying a word or responding in any way, pull out your calculator (I make it a point to have both my calculator and a pen in my hand when I go into my closing procedure) and do the math on your diminished offer.
Do a little summary, like, "Well, this and this have to be done, and the cheapest way to do that is with the service agreement, so I'll leave that in. That means I'll be back within the next 12 months at no additional charge. I'll make a note of these things and we can address them in the future, and I'll always charge you to the least amount of money possible."
Show them the calculator and say, "There you go. That's the least amount of money I could charge you today."
This technique shows customers that you're willing to bend a little and work with them to accommodate their specific needs, wants and desires. Most people like that.
These are the responses to get you past the easy ones. If they don't buy at this stage of the game, the situation graduates from the "price complaint" to a full-blown "price objection." I'll cover that for you next month.
Charlie Greer is the creator "Quantifying Quality: How to Beat Low Bidders," and "Over The Top HVAC Sales." For information on Charlie's products and speaking schedule, visit his website at www.hvacprofitboosters.com or call 800/963-HVAC (4822). E-mail Charlie at email@example.com, become a Facebook friend at www.facebook.com/the.real.charlie.greer.