How to Deal with Cost Objections

Part of every salesperson’s job is fielding customer objections. Some of these are related to price - it is what it is.

Almost 60% of buyers want to discuss pricing on the first call. That’s hardly surprising, really. Who wants to shell out their hard-earned cash without doing a bit of investigating first?

Here’s the thing:

Not everyone deals with cost objections.

It’s smooth sailing when the general public assumes your price is fair.

But where do they get that message?

Here’s another thing:

If cost objections are a regular problem for you, you haven’t done a thorough enough job in your sales cycle.

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Cost objections are a major source of anxiety for salespeople around the globe. If you let it get to you, you’ll start asking damaging questions like, “Is my product good enough?”

That kind of negativity needs to be nipped in the bud. It’s not your product that’s at fault. It’s just a matter of fixing up your sales cycle and communicating your value properly.

People want their problems solved. That’s a major part of selling any product or service. They need to know that you have the expertise to back your price.

Here’s some good news:
Price is always a part of the customer’s decision-making process, but it’s not the major deciding factor.

When you’re facing cost objections, you need to focus on two key issues:

1 - What is the Problem You’re Solving?

Your customers aren’t going to budge if they don’t know that there’s something that needs to change. No one’s going to give you money to fix what isn’t broken or to make a change if there’s no reason to.

If you went to a heart surgeon who claimed your ticker was fine, you wouldn’t be shelling out for surgery, would you?

Customers will only convert if they realise that they have a problem that needs solving or if there’s something distinctly missing from their daily lives.

Change this message in your sales message and you'll have won half the battle already.

2 - What’s the Cost of the Problem?

The other half of the battle is making people aware of the cost of the problem.

It’s all about developing an understanding. When someone goes to a mechanic to fix their car, they’re expecting a “typical” figure on their bill at the end of the day. If that bill starts to look more in line with what you’d expect to pay for fixing an aeroplane, the customer is going to have some serious cost objections.

It’s up to you to make it clear to the customer what the actual cost of the problem is. They can’t just infer from context.

What cost is the problem having on their business?
What cost is the problem having on their life?

Use one of these two questions to make it clear that the cost of not fixing the problem is much greater than the cost of paying for your product.

If you don’t know how valuable your service is, how should your customer figure it out? It’s part of your responsibilities as a salesperson to develop an understanding of what that figure actually is.

Your Optional Strategies: Cost Leadership or Differentiation

You don’t really have too many options available when it comes to the cost objections game. You can either:

Make sure you’re the least expensive
OR
Deliver value through your uniqueness

The cost leadership strategy speaks for itself. If you’re the cheapest option on the market, people are more likely to lean towards giving your service a try. Everybody loves a good deal, right? You do need to be aware that there might still be a few cost objections from customers who like to play hard ball. That’s just par for the course.

If you’re opting for the differentiation strategy, you’re probably not on the cheaper end of the spectrum. That’s okay. You know your worth. This does, however, mean that you’re going to need to put in a little extra effort to set yourself up as a prime candidate for your customer’s interest.

You need to be ahead of the game in three ways:

1. You need to be someone the customer can rely on.

2. You need to be highly capable of helping the customer.

3. You need to prove to the customer that you really do care.

The sales game has changed a lot in the last few years. People aren’t motivated to buy from faceless corporations anymore. You’re dealing with a whole new generation of consumers who are interested in the face behind the name. They want to know why they should choose you above everyone else. What makes you so special?

Show Confidence in the Expected Outcome

When it comes to business solutions, in particular, price is almost always a reflection of outcome. If you were offering a 100% guarantee that you would be resolving the customer’s business issue, they wouldn’t think twice about paying your price.

For example, you could ask your customer, “If we could get you an 80% increase in sales within a year, would it be worth the investment?” Their answer would probably be a resounding yes.

This is proof that the concern isn’t really about price. It’s about the outcome.

In this case, your approach should be to ask what would give the client greater confidence in your proposal. Take the time to get all of their concerns on the table.

If you focus on building confidence, you’ll have a much easier time of it.

Never Haggle. You’ll Damage Your Reputation

There’s a distinct difference between negotiating and haggling. The former is perfectly reasonable. The latter has no place in the business world.

It’s okay to make adjustments in terms and conditions. It’s just as okay to negotiate on the scope of work between two parties. It shows a willingness to be flexible and to address the customer’s concerns.

If the customer asks you to do the same work as initially proposed for a lower price, it’s well within your rights to offer a firm “no”. Haggling on price alone devalues your service offering and sends the message that your work wasn’t priced correctly in the first place.

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What are your tips for dealing with cost objections? Let us know and we’ll feature your thoughts in our community.