Overcoming Price Objections (Part I)
Last week, FEI sales leader Zoot taught young salesman Ganymede how asking thoughtful, probing questions is an important part of selling. This week, Zoot introduces his apprentice to another powerful selling skill: the ability to handle price objections effectively. Remember, fire = print.
Every Wednesday after work, Zoot and Ganymede exercise at Olympians Gym. Health-conscious Ganymede focuses on cardio, while vain Zoot prefers to sculpt his shoulders, chest and arms. This week, After Ganymede finished a half-hour session on the Gladiator Combat Simulator, Zoot asked him for a spot on the bench press.
Ganymede stood behind his friend and mentor, who was stacking weight after weight on the barbell. “I’ve been encountering a lot of pricing objections on sales calls recently,” Ganymede said.
Zoot put the last weight in place and lay on the bench. “I know it can be frustrating to hear time and again that FEI’s doing everything fine, but we’re just too expensive. But the last thing we should do is slash our prices just to keep every torch- and match-making machine running. Our torch and match prices are arrived at carefully, and cutting prices suggests that they’re artificially inflated to begin with.
“Plus, discounting is a slippery slope. If we reduce our price once to please a customer, they’ll know they can influence our pricing and will behave as such. And if we return prices to their original levels, price shoppers will just go somewhere else.”
Zoot removed the barbell from the uprights and lowered it to his chest. “Think of pricing pressure as this barbell. We could give in to this pressure and let it crush us. Or...” [Zoot lifted the barbell high above his head] “we could counter it with our own strength!”
Ganymede didn’t look like he was following the metaphor, so Zoot elaborated. “The best way to handle price objections is to shift the focus from price to the other things we do well.”
“Such as?” Ganymede asked.
“Providing a better solution, for one,” Zoot replied. “On any given day, a quote request will come in for torch-lighting services that we simply won’t be competitive on, price-wise. Perhaps we should just let all these quotes go.”
“I take it that’s not your point,” Ganymede said.
“No. Instead, we could go after the job anyway—though it’s probably not reasonable to do this in every case. We call the customer and get every detail possible about the job. Then, we provide an alternative solution,” Zoot explained.
“It won’t necessarily be the lowest price, and the customer won’t necessarily use us. But, our effort will not be forgotten. The next time that customer has a challenging torch-lighting job, he or she may reach for the phone and dial our number. This is what Marka calls ‘top-of-mind positioning.’”
“What else?” Ganymede asked.
“The next way to take the focus off price is to showcase our strengths. Ganymede, are the running sandals you’re wearing the absolute cheapest ones?” inquired Zoot.
“No,” Ganymede admitted.
“Why not?” Zoot pressed.
“Because when it comes to something like running sandals, cost is not what I care about most. For starters, I need shoes that will protect my feet from injury. A cut-rate sandal may not offer this protection,” Ganymede explained.
“Bull’s-eye,” Zoot said. “Similarly, fire customers don’t buy from a particular vendor over and over again because that vendor is the cheapest. They buy from reliable companies that offer them convenience, safety and peace of mind. Think of the reasons why our best customers continue to do business with us. ‘Lowest prices’ should never be one. Because FEI makes customers feel completely comfortable with the way we handle their work, we don’t need to have the lowest prices.”
“So how do I demonstrate to prospects that we offer this exceptional fire-buying experience?” Ganymede asked.
“FEI’s unique selling proposition is ‘Always there,’” Zoot answered. “So every communication—in-person visit, phone call, e-mail—you send to prospects and customers should drive that point home. Remind your customers as often as possible exactly what your unique selling proposition is and how you make them comfortable throughout the fire-buying process.”
“I’m so inspired by our conversation today that I’m going to try bench-pressing myself,” Ganymede said.
“Great!” Zoot replied. “It’s all yours.”
Ganymede looked at Zoot’s bench with trepidation. “Uh...but I may need to take some weight off first.”
Today’s FIRE! Point
Whether you sell torches or commercial printing services, resist the temptation to lower prices to get your “foot in the door.” Instead, move your customers’ focus away from price. Show your intelligent problem solving and commitment to helping them out by offering alternative solutions. Demonstrate your company’s strengths and USP—what makes your company more than the sum of its services.
FIRE! In Action: Procter and Gamble Raise Prices and Profits
Procter and Gamble responded to a hike in oil costs by raising prices and rolling out a high-end skin care line. Consumers were willing to pay more for the name-brand products, and P&G saw an 11 precent increase in annual profits.
Next week: Zoot and Ganymede discuss two more ways to overcome price objections.