What to do When Your Product is More Expensive than the Competition

An area where consultative selling excels when compared with impersonal, transactional sales is in handling objections. As the consultative selling process establishes a relationship and seeks to build trust before asking for the business, salespeople using this approach are more likely to successfully overcome common stalls and fear in prospects than those trying to “hard sell” someone into making a decision.

The price objection is a common stall, but one that should not be dreaded, as long as a salesperson has done his or her research to determine if the buyer being courted truly has the means to purchase whatever it is that she is offering — in other words, making sure the buyer is qualified. Once this is established, then a salesperson can be certain that any price objections are simply stalls, and can take effective action rather than withdrawing or arguing.

Here are a few tips in closing the sale, even when your price is higher than the competition’s.

Be the first to mention price

If you know your prices are higher than the competition, the smart thing to do is to bring this up first. The way you do this depends on the situation, but here are a few examples of wordings:

• “Because of our outstanding value and guarantees, our service is a little more expensive than typical vendors in this market. Is this going to be a concern?” This one is especially geared to prospects that might seem a little vain or status-conscious, who would most likely answer “Oh no, money is no problem.”
• “We are not the cheapest guys in town, but you would agree that paying a just little more, yet getting substantially superior results might be worth it, right?”
• “Since we source the finest Corinthian leather for our deluxe office chairs, they are obviously priced at a higher value than the generic chairs you might have seen pitched by others. However, we offer an excellent payment plan where the monthly payments are actually less than what you would pay at one time for an inferior chair.”

Mentioning price first as part of consultative selling allows salespeople to take the offensive and emphasize the greater value of their offering relative to its cost. Most buyers will appreciate you being upfront about price, rather than hemming and hawing around the issue.

Hold your ground

While you might have some leeway in your prices, resist the temptation to go lower on your price when your buyer mentions that you are more expensive than the competition. Corporate buyers, first of all, are trained to ask for discounts — and some might even receive bonuses tied to how much money they save.

Bring the conversation back to the value you are offering and use key differentiators (“we are the only firm in town that delivers this quickly”), the reduction to the ridiculous” technique (“the difference in price amounts to 50 cents per day”), and other tools to lessen the price objection in the mind of the prospect.

Then, if the buyer still drives a hard bargain, you have made your value plain enough to see that any reduction will be minor, and more to satisfy the ego of the buyer rather than truly lower their cost of acquisition.

Consultative selling puts more control in the hands of salespeople, while making for more pleasant buying experiences for customers as well, as they are being listened to rather than simply coerced. As can be seen, it can also decrease the need for discounts, resulting in greater profits for a firm and larger commission checks for its salespeople — goals well worth achieving.