Overruling Price Objections

Whether it’s a $100 phone bill or a $200 check at the grocery store, everyone has been confronted, at one time or another, with a grand total higher than what they expected to pay. On large home improvement projects like landscaping installations or even extensive lawn maintenance, many consumers are overtaken by even more severe sticker shock – much to their contractor’s chagrin. While discussing budget up front can prequalify customers and avoid cost-related conflicts altogether, industry consultant Jim Kasper shared some other tips on overcoming price objections at the 2004 Landscape Industry Show in Long Beach, Calif., Feb. 17 – 19.

“People will automatically say a price is too high because we have trained them to expect a discount from us,” says Kasper, president, Interactive Resource Group, Aurora, Colo. “As a result, service contractors have to deal with stallers and price objectors on a regular basis. We have to find a way around that.”

According to Kasper, the first step to overcoming price objections is to identify whether a given customer is a “staller” or an “objector” because interactions with each group are handled differently. For instance, a staller may comment that he or she cannot discuss a proposal until speaking with a spouse. That is, they’re stalling the discussion until a later time. Objectors, on the other hand, may question or express concern over the proposal as a result of a communications glitch during the presentation. For example, an objector may ask, “Why does this project cost so much?”

“When your customer stalls, it can be for a number of different reasons,” Kasper says. “The customer may be concerned about the timeframe of the project or the sales process, they may be deliberately trying to stop your sales cycle, or they may not be the ultimate decision-maker for the property. The reasons the customer is stalling may be legitimate, but it may not be an obstacle that the contractor can overcome immediately.”

However, “price objections are commonly communications issues – not product or personal issues. We may not have been specific enough in our presentation,” Kasper says. “These types of customers ask questions in the form of objections. They may not have understood your proposal or they may not have been listening carefully while the contractor was speaking. Also, contractors have a tendency to use technical terms in their presentation and the client may not have been clear on that ‘lingo.’”

Kasper explains that contractors often can deal with price objections on the spot by delving deeper into the client’s real concern and addressing that specific issue. “The two main goals of overcoming price objections are to build credibility with your customer by validating your own competency as a landscape professional and to move the customer to the next stage of your sales cycle,” Kasper says, offering seven steps to do just that.

STEP ONE: Listen carefully, don’t interrupt and take notes. “Our first tendency when discussing proposals is to talk and try and make an explanation, but that can often lead to more questions or more problems,” Kasper says. “The key here is to ask the customer a question and then keep quiet while they’re responding. Silence is deafening – people will keep talking and ultimately tell you what’s really bothering them if they’re greeted with silence.”

STEP TWO: Show understanding, NOT agreement. “When the customer says, ‘Your price is a lot higher than I expected,’ respond to them by saying ‘I understand what you’re saying,’ – not, ‘I know, that is a lot of money.’” Kasper comments. Agreeing with the customer simply validates that the price is high – maybe too high – and that something should be done to bring that down.

STEP THREE: Make a presumptive close. When a customer comments that the price is their biggest concern about a proposal, Kasper recommends asking the following question: “If we can get past the price issue, do you see any other reason not to give us a try?” “This question lets you get everything out in the open because it gives the customer another opportunity to share their other concerns,” he says. “If they tell you that price is their only objection that tells you that you can get that job by overcoming the price conflict.” Still, attendees were quick to point out that they want to sell jobs on their own terms, which means moving onto the next step.

STEP FOUR: Isolate the objections by paraphrasing with a direct question. Ask: “So you’re saying the only reason we can’t go forward is the price?” It takes guts to ask this question, but Kasper points out that a “yes” response effectively eliminates low-bidding competition. “Customers are rarely looking for the lowest price – they’re looking for the best deals,” he says. “When a customer tells you prices is their only objection they’re really saying that you’ve got the job if you can tell them what makes your service more valuable than that of your competitors.”

STEP FIVE: Explore the objection for underlying motives. Step Four often needs to be examined further, which is accomplished here. Kasper recommends going back to asking open-ended questions like “Tell me more…” or “How concerned are you?” and then listening closely to customers’ responses. “This step helps you find out what the customer’s hot button is,” he says. “Asking them to compare your proposal to the other proposals that they received can help you identify their underlying concerns, such as value or service quality.”

Additionally, one attendee mentioned that having the customer compare your proposal to those of your competitors will help them see the difference themselves. For instance if they say, “I like your design better but this other contractor was cheaper,” the customer already sets your company apart based on the design quality. From there, price is the only objection to resolve.

STEP SIX: Match your product or service benefits to your customer’s concerns. In this step, Kasper tells contractors to approach customers on a more emotional basis, illustrating why their company’s services are worth the price – that is, why they “cost so much.” “Say to your customers, ‘Now that I have a better feel for your concern, allow me to explain where we’re coming from,’” he says. “Take some time to review the proposal and appeal it to the customer in a manner more in line with how they plan to use their landscape in the long term, as opposed to its monetary effect right now. For instance, have the customer envision what the completed project will mean to them in five years and whether the cost of installation now will be important when the landscape is an established, comfortable place to enjoy their home.”

STEP SEVEN: Confirm that you have properly addressed the objection. “Because so many price objections originally stem from miscommunication, make sure that you’ve provided your customer with adequate explanation to put any of their concerns aside,” Kasper says. “If you don’t satisfy your customer’s concerns you’ll leave without the job. However, by really identifying what was bothering them and ensuring that those concerns are addressed, you can recommend to the client that the sales process continue before too much more time passes and you’re able to close the sale.”

The author is associate editor of Lawn & Landscape magazine and can be reached at lspiers@lawnandlandscape.com.