A prospect can present any number of objections during a sales call, but the most common is “Your price is too high.” The timid, ineffective salesperson lets it end there and walks out the door without the close. But not you.
For you, the price is always right — because you understand the value of what you’re offering. All you have to do is get your prospect to that same understanding. Once they’re there, they’ll see very clearly the good deal that they’re getting.
There are several ways you can do that:
Payment versus price. Tell the prospect, “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 in energy and repairs.”
Quality versus cheapness. Ask the prospect, “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 equipment actually saves you money in the long run. When would be the best time to start saving that money?”
Initial Price and Value Elevation. Begin by quoting a price that is very high, and then gradually build your value to match or exceed that price. Then your actual price will sound far more reasonable.
For example, you can cay, “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 be greater than $6,000.
When you present the proposal, you 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.”
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. Sales master Charlie Greer says that 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’ve got to 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. Don’t ever speak of the full price of your system versus their own view of the most they’ll pay; only refer to the difference. For example, if your system is $6,000 and he only wants to pay $5,200, you never mention $6,000 again. Instead, you say, “We’re only $800 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, tell the prospect, “Your payment on the $800 is less than $17 a month. You’ll save more than that in reduced energy consumption.” Or, “You’d spend more than that on repairs to your old, energy wasting system. But your new system comes with our five-year parts and labor warranty; so any and all repairs are free.” Or, “Over the 10-year system life, this $800 is just over $6 a month, which is about $0.21 a day. Isn’t it worth getting what you want for $0.21 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.
If you can learn to overcome objections, you overcome resistance to the sales process. And the price objection is the one you’ll face most often. Follow these tips in order to close more sales, more often, at higher prices than ever before.
Adams Hudson is president of Hudson, Ink, a creative marketing firm for contractors.CB readers can get a free 12-page booklet, “How to Double Your HVAC Sales in 90 Days” by sending an email to firstname.lastname@example.org or by calling 1-800-489-9099 or faxing the request on letterhead to 334-262-1115. For a free marketing newsletter, contractors can fax their letterhead with the request to 334-262-1115 or check out www.hudsonink.com for other free marketing articles and reports.