156: How To Totally Smash Your Price Is Too High (Part Two) - a podcast by Dr. Greg Story

When we are haggling over the price with the buyer and they say, “this price is too high”, “that is out of our budget”, “we can’t afford it at that level, can’t you drop the price”, “we never pay that much”, “we can get it for less”, etc., we are in a bind.  We want the sale, we want to make our sales targets, so we immediately go into discount mode. This is a big negotiating mistake. 

 

I heard this exact case from a Japanese sales guy recently.  We happened to be seated next to each other at a business function. I started chatting with him about how he does his sales.  He had been selling for his firm for 7 years and looked to be in the mid thirties age bracket. In other words, he was an experienced sales guy. When I asked him what he does when his buyers say the price is too high, he replied that he immediately drops the price by 20%.  I nearly had a heart attack.  If I was his sales manager, I would have to be physically restrained from throttling him on the spot. 

 

No, no, no. Don’t fold on the price pushback.  What we should be doing is defending our price.  We never do that by arguing with the buyer.  We don’t do that by force of will either.  These ideas both sound preposterous, but amazingly this is what some salespeople actually do. Instead, we try to better understand the client’s situation.  Often salespeople stop asking questions at this critical juncture and instead go into high energy “tell and sell mode”.  They keep telling all the good reasons why the buyer should pay the requested price.  This won’t work. 

 

Firstly, don’t start your response by arguing with the client.  Instead agree with them. We can say, “You are right and I understand it is a considerable investment”.  We do this to make sure the client is still listening to us.  If we disagree with them, they stop listening to us and start thinking about all the reasons their “too high” statement is correct.  They mentally get ready for hand-to-hand combat mode to fight with us.  We don’t want that response from the buyer.  Rather, we disarm them by not arguing or disagreeing.

 

While we have their attention, we have to transition and question the buyer as to why they made that comment.  We say very sweetly and softly lowering our voice tone, combined with a touch of real curiosity, “You just mentioned the price was too high.  May I ask you why you say that?”.  We avoid arguing and Instead of us having to justify the price, we now need to switch the pressure back to them, to justify what they just said. We call this tossing back the porcupine, after they threw it to us.  It is a rather spiky, uncomfortable thing to hold, so we don’t want to be the one holding it. 

 

Here is a very, very, very important point, so don’t miss it, please listen up.  After you ask that question, DO NOT SPEAK.  Use 100% concentration to listen to the buyer.  Don’t interject.  Don’t cut them off. Don’t add one more word.  Shut up. Now the buyer has to justify why that price won’t work. 

 

In this process of further explanation by the buyer, we pick up very valuable insights into the client’s situation.  Armed with more data and insight, we may be able to come up with a flexible solution that is a win-win for both of us. 

 

We may in fact discount the price. We might give them longer payment terms or structure the payments across two quarterly budget periods. We may offer the discount on the basis of a volume purchase.

 

All of this sounds simple enough, but when salespeople hear “the price is too high” they go blank and forget the basics.  Don’t argue with the client.  Question the client and keep questioning. If they segue off on to some unrelated subject area, then bring them back.  If they digress, don’t go with them, bring them back to the core discussion.  If they keep hitting you with vagaries, don’t accept them.  Keep digging, digging, digging. 

 

This is the job of the salesperson, to serve the client and that means to clearly understand the client’s situation.  The only way to do that is to ask questions and you cannot release the buyer from this quest.  It is not to be annoying, pigheaded, stubborn or inflexible.  Quite the opposite.  We are here to solve the client’s problem and we have to do that in an arrangement, that is a win-win for both of us. 

 

Action Steps

 

1. Defend the price point, even if you will lose some business
2. Make sure that the price point/value equation is clear to both the salesperson and the buyer
3. Understand once you discount the price, you are now locked in for that number or an even worse one
4. Don’t argue with the client, instead ask well designed questions to understand what is driving their resistance

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