Four Simple Rules of Price Qualification

I received an email advertising a webinar that was to be held on the subject of the “dreaded price objection.” The promise was that if I invested 50 minutes of my time I could learn how to find out “what people really mean when they say you’re too expensive.” Really? That doesn't require a lot of translation.It has been my experience that when a customer tells me that my product is too expensive that what they usually mean is that my product is just too expensive. It isn't an objection. It is a fact. Sometimes a customer just can't afford what you are selling. The key is to be bold, do your job and take the necessary steps to qualify the prospect on price. You can't afford to waste your limited selling time in a fruitless attempt to convince an unqualified prospect to accept your price when what you need to do is invest your time to develop some new prospects that don’t have the same budgetary constraints.For instance, I once stopped into a Bentley dealership. I really like the Bentley Continental Supersports. Who wouldn't want one? But its $260,000 price tag had about three too many zeros for my checkbook. If the Bentley salesperson thought that he was going to navigate the shoals of my price objection and arrive at a signed purchase contract then he would have wasted a significant amount of his limited sales time with me. In this case, I never got the opportunity to voice my 'price objection' because the salesperson took one look at the car I drove up in and made himself scarce before I even walked in the door.Here are four simple rules of thumb about price qualification and price objections that will help you make sure you put your sales times to its most productive use.1. Price qualification is an agreement about value. Price qualification means to reach a preliminary agreement with the prospect that their assessment of the value that they will receive from your product or service is proportional to your price. In other words, you have reached a tentative agreement about the value the prospect will receive for the dollars that they are going to pay you. Qualification on price and value doesn’t mean that a prospect is in love with your price. But it does mean you're in the ballpark and any further discussions of price will become a negotiation about scope and deliverables, not handling an objection.2. A price objection is a valid reason to disqualify a prospect. Disqualifying a prospect on price must take place early in your sales process. A true price objection from your prospect late in the sales cycle means that you misplaced your backbone at the moment of truth and didn't disqualify them when you had the opportunity. They were never a true prospect for your product or service and you just wasted a lot of your sales time with someone who was never going to buy from you.3. Be direct with a prospect about your pricing. Salespeople have developed an unhealthy fear of the price question. It scares them. Like zombies or movies based on Jane Austen novels. There is no mystery to qualifying on price. The shortest distance between two points is a straight line. Do what you do best. Ask the right questions of the customer to understand their requirements and make sure that they are aligned with your value proposition and capabilities. And then talk price and value with the prospect based on their requirements.4. You can't get a price objection from a truly qualified prospect. As discussed in #1 above, an intrinsic part of prospect qualification is a rough agreement on price and value. If the prospect is still pushing back on price but wants you to move forward with them in their buying process, then you didn't effectively qualify them on price. No matter where you are in the prospect's buying process you need to stop and re-qualify them on price. If you think you are too close to the situation then you might need help. Call in a manager or colleague, an objective 3rd party, to help you re-qualify.Lastly, if you disqualify a prospect on price, don't let them persuade you to keep on selling to them. It is possible the buyer has a hidden agenda and is using you in order to advance it. Don't let a prospect consume your selling time in order to use you as a leverage point to negotiate a better deal with your competition.