I recently heard a B2B company owner complain about how his sales team is trapped in price-driven sales. He says his salespeople submit copies of competitor invoices and request approval on discounted proposals. Unfortunately, as I understand, those salespeople are not competent in handling price objections!
It’s unrealistic to think that price of a product doesn’t play a factor
Everything hinges on the customer’s pain, need, or perception of your company’s brand/reputation.
First, let’s look at the three key indicators determining how much of a factor price will play in any given sale. Then I’ll share a bonus tip that will help your salespeople handle requests for discounts.
If the prospect is happy with their current product, you can expect the buyer to have a “money talks” attitude. Getting beyond price means finding a significant area of frustration.
Salespeople, especially those generating their own leads through cold calling efforts, will push and push and push to get an appointment. As a result, they often meet with prospects that don’t necessarily have an immediate need.
Is your product/service going to make-or-break the prospect’s ability to improve their business, make more money, or be more efficient? Your ability to create a need will determine whether the purchase is “worth it.”
This is where the underdog struggles most with pricing. Prospects know this and often use the little guy to negotiate a better deal with their current supplier/vendor.
If you are the underdog, focus on building your brand and reputation for being different and better in areas where your big-name competitors are weak!
As a business owner or B2B sales manager, don’t be so quick to dismiss price as an issue. And don’t be so quick to point fingers and blame your players. Instead, take each sales scenario where the price is a question and apply it to the three indicators. Focus on improving your salespeople’s ability to uncover pain and develop needs. Then drive an organizational effort to build the brand, reputation, and GLARING differentiators.
Build options that allow the salesperson to adjust to the product/service offering. If the prospect asks for a discount, the salesperson can say, “I don’t have a discount to offer on these services, but what I can do is remove some of the items from the package. If we remove this item, we can get it down to the price you are requesting.”
Think of it like being at a grocery store checkout counter. If the customer claims they only have $100 and the bill is $125, will you let them walk out with $25 worth of free merchandise? Nope. They will come up with the $25 bucks or take items out of the cart. In either case, they will find a way to make the deal happen!