Price objection appears as the main closing obstacle though it is not especially different from the other objections. I would say that often times it’s an even smaller objection since there is ground for finding a common understanding. Unlike size, color and other subjective, taste and purely emotional preferences, price is pretty factual. You need to understand what the objection is to a price and the fears related to it.
• Understanding prices
A high value product does not mean it is expensive to your affluent customer. If they are looking, it most likely means that they can afford it. The level of price is simply related to the quality and the category of the product. The perception of price largely depends on the wealth of your customer.
And a product in itself is never too “expensive.” Again, affluent customers are used to buying high value products. A car costing a million US$ can be seen as reasonable when it is perceived as having a great value. It is expensive only when it is perceived to have no inherent value. If it could be seen as having less value than the price reflects, then it isn’t worth it. Customers compare products they know and use their former experience. Most of the time, they simply suspect that the price is artificially set, and set far too high (Table 5.6.B).
What you need to do is to be able to explain a price and defend it.
Table 5.6.B Explaining the price
Legitimacy, image, heritage, exclusivity.
"As you might know, our brand is not only a brand—we symbolize quality and security."
Quality, cost to produce, rarity, durability.
"All brands claim security is important— we are really making it more secure, better than all other systems available in cars on the market."
Service, after sales service, customer care.
"Because our focus is on your experience, we also care about the after sales service. We offer an incomparable list of extra services that we are the only ones to offer."
Newness, opportunity, time savings, pleasure of the moment.
"This model is new and you will be the first to enjoy all the technology and awesome design."
Fair/correct/best price, investment, return on purchase value.
"It's definitely a Luxury car and you deserve it! And if you take the time to do the math, you will see that it's a very good return on investment."
- A price is a sum of values
The best way to explain the value of your price is to do some math: Brand + Product + Place + Time = Price
- A price is an investment
Martial: “Mr. Wang, you are a successful businessman and I am sure that
you can also see in this timepiece, collectible value and investment opportunity.”
Peter. “I am not sure how this will increase. While with some traditional
brands, the increase has been proven, right?”
Martial: “Precisely, Sir. The magic part is the unknown! The true
collectors are the ones able to find the treasure before anyone else.”
Peter. “The risk is higher with new brands—to have bet on the wrong
Martial: “Sir, I am sure that you always invest wisely. With our timepieces—with the quality and rarity we offer—I think we can be sure that they will not lose value. Now the question is by how much can it increase?”
Luxury creations and high value products are rare most of the time and prices do increase every year. Raw materials and skilled labor costs increase very quickly, every year. There is also a market for reselling to collectors. You need to present the following two considerations to the customers: buying today is cheaper and the product will be worth much in the future.
- A price is profitable
A Luxury creation is of a higher quality and therefore is built to last. A very good handbag could last a lifetime. A piece of jewelry or a collectible timepiece can also be handed down to the next generation. When you look at what you have bought, generally speaking, it is most likely the case that the low-priced products you purchased have been damaged or lost. You look after the high value items more carefully simply because they are of a superior quality and they are intended to last. A good pair of shoes can last years, and stay smart. A good and reliable car saves time, even lives. In many cases, depending on the product, it is always possible to find examples that demonstrate that quality can also mean savings for those who can afford the initial purchase.
Simon Cole convinced Sophie and Thomas Williams on the price of the house:
Thomas: “The price of this house is far from our initial budget and you
Simon: “Is there any risk that you don’t like it?”
Sophie: “I think we are safe on that side—it’s the perfect family
Simon: “Okay, that’s very valuable you know. It means that you don’t take
the risk ofmoving out—which always represents a high cost. And if you choose to keep it for many years, you are pretty much guaranteed that the house’s value will increase nicely.”
Thomas: “But we will still to have to invest more.”
Simon: “Yes, you are right. As far as your investment will be profitable in
terms of cost saving and potential gains in the future, I believe it’s worth considering. My job as advisor is to present you with all the options from a profitability perspective, and encourage you to view price from different angles.”
- A price is a saving
Prices do increase and this is especially the case with luxury and high value items. They are rare and complex to produce and require many components that are rare, expensive and, therefore, come with the high possibility of price increases in the future.
Allan Taylor: “I can see that my wife likes this necklace. Now I am not sure
that the price is the right one to be very frank with you.”
Alice: “Yes, it’s almost as if it was specially designed for Michelle!
About the pricing of such a beautiful piece of jewelry, we are a highly reputed jewelry house because, of course, for a long time now we have ensured all our creations are fairly priced and have created a fair pricing policy. It takes into account the gold, diamonds and so on but also the workmanship and time.”
Allan: “Do you mark down the prices of old pieces?”
Alice: “Oh, very often it’s the contrary. You know that prices for
diamonds and gold are always on the increase. Prices therefore will continue to increase. Not taking into account the salary ofthe various artisans who can work over a hundred or even a thousand hours on the collections. These labor costs in rare craftsmanship also increase very rapidly. To make it short, buying today might already offer a saving since prices increase all the time.”
The argument that buying today is cheaper than buying tomorrow is a recognized and very often true fact. If possible, you can even calculate the average increase and show examples through different catalogs if need be.
- Price is also pride (no italics!)
Allan Taylor: “Still, there are quite some digits in the price tag!”
Alice: “Absolutely, Sir, and it’s definitely an important art piece that
not many people can afford! Mrs. Taylor can be very proud of your decision!”
Customers do not only want to own, invest and save. A high price also symbolizes power. There is nothing wrong in the desire to feel powerful. It’s very often an attribute of affluent customers without there being any arrogance, it is simply the result of a feeling of achievement and reward. Why not encourage customers to think in this way?
• Understanding Fears On Prices - Fear of overpricing
Allan Taylor, like anyone else, wants to be sure that he is not overpaying. For a Luxury creation and high price product, the price is pretty difficult to compare. A necklace’s price is not a sum of the number of diamonds. For a sports car, how can you compare it with another model? Normally a Marketing Department has done a great job and price is fairly defined.
Weaker sales advisors tend to question their own brand’s prices while the more experienced sales advisors focus on how to defend and explain the prices.
John Hudson: “I feel that the price for the same category of car is very high!”
Henry Smith: “Not sure with what you would compare Mr. Hudson.”
John: “For a SUV, 4-wheel drive”
Henry: “It’s pretty large segment, Sir. We are definitely premium—
that’s the only way we can deliver the best quality. There is a huge team of market researchers in our company and I trust that we are absolutely within the market price. Besides, we are, and I repeat, again very focused—if not only focused—on security which means quality. We cannot go low and therefore compromise. Security is about life and it is priceless.”
Golden Rule Corner
Defending a price is first about believing in the price and being able to explain it and defend it. Don't be weak—trust your price.
Fear Of Going Over Budget
The Williams were afraid of going over budget:
Thomas: “I am also not very sure if we can afford the mortgage.”
Simon: “Well on this side, if you need my help I can help you to estimate.
But I guess that this is something pretty personal.”
Thomas: “You are right. I roughly calculated about an increase of 25% compared to what we were prepared to spend per month.”
Simon: “May I share with you my experience on this? This situation
happens all the time. The most important consideration is not the initial budget you set per month. But considering the house and its new budget per month, would this be something you are willing to invest?”
Thomas: “It’s true that with 25% per month it’s still affordable even we have to be a little bit more cautious.”
Simon: “Well, your mortgage is not lost right? It’s an investment in the
Thomas. From this angle for sure it looks better.”
Most of the time, the notion of budget is not the main lock. The most important factor is to relate the cost to the income or wealth. In doing so, the cost then seems smaller and suddenly affordable.
- Fear of overpaying
No one wants to pay more than others and that, of course, includes your affluent customers. Being wealthy does not mean that you don’t consider cost. You certainly hate the idea of overpaying just like anyone else.
Moreover, affluent customers buy and trade more than most people and are familiar with the buying process. They love the idea of acquiring at the best price.