Inside Sales Telesales Tips Blog

Price negotiation: when the prospect won’t buy today because your price is too high

Marianne is an inside sales rep who's just landed a telesales job selling high-end graphics tools to developers. Many of these folks are already customers, and her job is to upsell and cross sell. And she's dealing with people that really need those upgrades, but can't find the budget. So they tell her to call back next quarter. Today's post is about how to deal effectively with that issue.

When I mentioned Marianne's dilemma to a friend, he told me that one of his sales colleagues from years past had countered the "I can't afford it" sales objection with "You know what, Bob? You can't afford NOT to have it." Then the sales rep would discuss the reasons why. My initial reaction was that this was just another cheesy closing line from the past, hackneyed enough that you wouldn't use it today. But then I thought, with a modification or two, it would work. Here's how:

Marianne's new company never lowers it prices. It's an engineering-intensive company with a huge R&D budget. They're always introducing new upgrades, too. Fact is, Marianne's pricing will never go down. Her products will always be increasingly more expensive. So she should use the following model:

1) Build value by understanding the customer's business. Determine if the upgrade she's selling can be used to help her customer to make more money, or prevent it from losing money. Don't even discuss pricing until your customer agrees that it makes business sense to acquire the upgrade.

2) If the customer then balks at the price and wants you to call back next quarter, let's say, then mention to the customer that a very good reason to acquire the product today is that the price might actually increase again before the next call. Here's how her response could be crafted:

"[First name], I'd be happy to call next quarter, but let me tell you why I'd recommend that you move forward today instead. You've already told me that this upgrade is going to save you a significant amount of time, so you know it has value. What our company tends to do is raise prices over time to reflect the additional engineering we put into the product, and when those price increases come, they tell me in a moment's notice, and I can't do a thing to roll back the prices. I can't tell you when our prices are increasing, but I'd hate to call you next quarter and have to tell you that the pricing is even higher than it is today." [Now just be quiet, and let the prospect/customer respond]

 I've personally used this effectively over the years when I've sold high-end products. It not only increases the perceived value of your product, but gets the prospect thinking that the pricing that he or she initially perceived as being high, might actually, in fact, be low. You can use this rebuttal with any high-end product or service that does have an R& D design and development component that's significant. This is a technique that I teach in my inside sales training courses, and I've witnessed its effectiveness in numerous coaching calls. Add it to your Best Practices playbook.