It's the most common objection salespeople hear from prospects toward the end of the sales cycle, but the reasons are not always the same. With a systematic approach to establishing value and a predictable way to manage the sales process, you can reach agreement with your prospect and close the sale.

It all starts at the beginning. And, if you hear this from your prospect during the first call, then you may be leading with product before you ever get the chance to understand what goal the prospect is attempting to accomplish. Without the prospect sharing a goal, such as "I'd like to improve my sales forecasting accuracy", no sale can take place and the sales cycle has not begun. In fact, the most common problem, and difficulty for salespeople, is to take the time to understand a prospects needs before they ever begin to discuss their products and services:

1. Not establishing value.
2. Not agreeing to an evaluation plan based on agreed capabilities. This is where you demonstrate, or prove, that you can deliver the capabilities the prospect needs. Is it your evaluation process, your prospects or have you jointly agreed to a common plan.

In simple terms, there are two reasons you might get this pricing objection:

1. The opportunity is being shopped. You are being used to negotiate with their Column "A" choice, but you are column B,C,D, etc.
2. This is a negotiating tactic that good buyers use—regardless of the facts. They may still want to buy from you, but they need to feel they are getting the best deal.

I am going to ignore the situation where you really are double the competitor's price, because your reps should either disqualify the opportunity early or you should change you price list to reflect market conditions. The situation also assumes that the buyer has shared a goal and wants to fix a known problem—otherwise price would be irrelevant.

To determine either #1 or #2 we need to have some clues along the way as to whether we are column "A" or "B". I repeatedly have to remind salespeople that negotiation starts with the very first sales call. A "quid-pro-quo" approach allows the buyer and seller to establish a different relationship than is typical. Many salespeople jump through hoops to satisfy the prospect during the sales cycle, saying "yes" to virtually every request from the buyer—without asking for something in return. When the end of the cycle comes and its time to negotiate, its simply not believable for the salesmen, or the company executives, to say "no" to pricing.

In the first situation, the buyer will very likely tell the salesperson throughout the sales cycle that they are "doing great". Good buyers don't let you know that you are losing. If they want you in the game until the end—with a mind toward using you as leverage against your competitor—they will provide just enough information and encouragement to make that happen. Buyers will often bend the truth until it hurts—they figure sales people (stereotypically) lie, so it's "OK" for them to be less than honest.

In the second case, if you have established a negotiated sequence of events with a prospect for the serious evaluation of your offering and you have followed those steps, then the buyer's claim that "your prices are too high" is an attempt to assure themselves and their company that they are getting the very best deal possible. While not a certainty, if your reps have followed a logical and traceable sales process, you will have multiple clues that you are column "A".

Continue on Page 2