Handling a price objection is easier when you are an employee of a company whose prices are fixed and not negotiable. But when you have your own business, especially a service business, and a customer challenges your price it can be difficult to overcome. As a small business owner a price objection may make you doubt the actual value of your services.
Depending on how established your business is or how much you NEED new business you may be tempted to make unnecessary price concessions to customers. This creates 2 problems: 1) you lose confidence in your value as a business, 2) your client now feels that your pricing is negotiable.
If you focus entirely on price to sell your product or service then so will your customers. Here are some ways to take to focus off of your price:
- Don't bring it up! If your customer does not mention price DO NOT BRING IT UP. Assume that the price is agreeable and proceed with the sale.
- Know your value. Determine at lease 3 specific things that your product or service provides that your competitors do not provide.
Some ways to differentiate your value are: your length of time in business, extended hours of operation, education level of your employees, safety features of your product(s), the screening process for hiring your employees, the quality control measures you have in place, documentation you provide, etc. Don't mention your competitors by name unless your customer brings it up. Know how and why you do things better and be able to explain this to your customer.
- Provide return on investment. Understand how paying more for your product or service can save your customer time, energy and money in the long run. Can documentation your service provides help reduce your customers liability exposure? Is your product more efficient and therefore requires less time and energy to use? Is your product more durable and will last longer? Do your quality control measures provide additional piece of mind to your customer so he doesn't feel the need to double check the job you've done?
- Some people just want a deal. For some customers the price objection is just part of their negotiating technique. In order for these customers to feel good about their purchase they have to perceive that you have made some concession for them. So instead of making a concession on price make them a deal on delivery time, volume discounts, contract duration or terms, payment options, etc.
- Don't be afraid to walk away. There will be instances when it is best to turn away a potential customer because you are not willing to lower your price. In order for you to maintain price integrity in your business you must be willing to let some customers slip away.