What to Do When Customers Tell You, Your Price Is Too High.
Before we get into how to deal with this question. There are three keys to remember.
The first thing to remember is to agree with the customer as much as possible. They say the Customer is always right. We all know that is not true. However, we need to agree with them anyway. Showing empathy is the only way to diffuse an argument, complaint or an objection. Grant Cardone, one of the greatest sales experts in the world says: Agreeing with the customer is even more important than closing the sale because if you constantly disagree with the customer, you won’t have a sale anyway.
The second thing to keep in mind is that You Need to be able to quantify the size of the problem you are solving in terms of money. For example, if you are selling machines that will increase your customers’ efficiency. Quantify the revenue increase they will get through the increased efficiency. Suppose your machines can boost efficiency which will lead to a 10 percent increase in revenue. Suppose their current revenue is $10 million using the current solution, so your machines will make them an additional $1 million. Clearly state this is the amount of money your customer will make/save by implementing your solution.
The third thing to remember is that your product/services have to be high quality in your industry even if they are expensive. If they are lower in quality, then the following lines won’t be effective.
Now keeping the three in mind, this is what you do when the Customer tells you, your price is too much.
Customer: “You charge $100,000?? Your Price is Too High!”
You/Your Salesperson: “While I agree that the price appears high, if you look at the One Million Dollars that our solution will be making/saving you, the Return on Investment is so high that the price of this solution is insignificant, isn’t it?”
Customer: “But the other competitor costs so much less. He is only charging $25000 for his machines!”
You: “Sir, the other party’s price maybe lower, but we will cost you less”
Customer: “What do you mean?”
You: “I agree that while the other options look cheaper, wouldn’t you agree that cheaper products often tend to cost more in the long run? For example if you bought a cheap, used car, wouldn’t that same car actually cost you much more in repairs and in time if it broke down when you most needed it?
Imagine the amount of money you would lose if any of these machines broke down slowing your production and stop you from fulfilling a big order? What would that cost you?
Our solution may look more expensive but we guarantee we will cost you the lowest in the long run. The competitor can beat us on price but no one can beat us on cost. We have always been the least expensive for our clients no matter what our price is.”
As long as you have established your credibility, doing this will get you the deal with most customers that care about increasing their revenue/lowering their costs more than they care about lowering the price.