Why you should hold your price.

Price objections come up often in sales, but usually, they are a complete red herring. Prospects use them to distract from the real objections. Training your sales staff to hold price during sales calls is essential on several fronts.

First and foremost, dropping price too easily sends the wrong messages to a prospect. It implies you were overcharging, or that you do not believe in the value of what you are offering as a solution. Smart prospects will throw out price objections as a way to test your sales force. Yes, occasionally, they actually want your solution and are attempting to squeeze into their budget, but most of the time, a price obejection is a sign of something else.

A price objection is almost always a good indicator to dig deeper and do more fact finding. During the discovery process, You need to train your salesforce to always focus on uncovering the following factors:

-Problem/Issue that needs solving
-Cost of not solving this issue
-Savings/Revenue generated by your proposed solution

With these three things identified and communicated back within the proposal, the price objection becomes overcomeable, because one can lay out an ROI and discuss it with the prospect. You are providing a numbers based discussion item to a numbers based objection.

I recently presented a proposal that included a page on the ROI estimates based on numbers the prospect and I had discussed during the process of discovery. As the client signed, he mentioned that out of 7 proposals he had received, mine was the only one that even addressed the ROI calculation. AMAZING. 6 other companies took the time to meet with the customer, and send in a proposal, yet did not do the homework of isolating the consequences and implications in terms of costs and revenue.

If your prospects consistently object on price, you have not done your homework in ascertaining value and ROI of your proposed solution. (either that or you got the math wrong)

If your proposal does not represent a wining ROI, then you should never submit it to begin with. No one objects on price when they see and identify the value of your proposal. They may try to improve the ROI by asking for a better price, but ultimately, budget concerns will usually yield to a good ROI.

So don't lower your price, unless you need to in order to provide a good ROI. Instead of not only providing a good ROI, but making sure that prior to proposing your solution, the prospect has identified and been made aware of the negative consequences of inaction, and the positive implications of action on your proposal.

Then when a price objection occurs, you know it is either a cover for another objection, or easily discussable.