You Are Not Too Expensive… It’s Something Else Entirely
Tom Stimson
November 25, 2022
A man in a blue dress shirt leads a business meeting with a client where he is explaining the value of his products and services.

We’ve discussed crushing single-level objections in sales meetings before. I’ve also defined different types of single-level objections and how to get your client back on track in another post, if you’d like a quick refresher.

This particular post is focused on the most common single-level objection we all dread hearing: “This is too expensive.”

There are three main reasons for the “too expensive” objection:

  1. You actually did overprice, and the customer is informed enough to know it. (This is the least likely scenario.)
  2. You’re including and charging for something the customer didn’t ask for. (This is far more likely.)
  3. There was a total breakdown in or lack of communication. Neither party understood what the other was saying.

Here’s the good news: the awkward “too expensive” talk is almost always avoidable.

The best way to overcome the “too expensive” objection is to handle it before you ever send the buyer a price.

When you hear the words, “You’re too expensive,” it means you’ve missed something. You missed the opportunity to explain the what and the why of the quote.

In other words, you’ve missed the opportunity to explain to the customer the value you’re giving them. This should have been done before the quote ever went out.

Infographic: ISL - 11/28

Value Justifies Price

If price precedes the value conversation, you’re probably going to run into an objection on price.

There are so many ways to quantify value. Time, convenience, fit and finish, urgency — all are components of creating value. In the sales conversation, you’re finding out where the value points are and then presenting that value to the customer.

Value justifies price, not the other way around.

You might say, “You told me it was very important that [these things] happen, so here’s what we’re going to do to accomplish them. You also said you didn’t want [this or this] to happen, so here’s what we’ll do to avoid those.”

This demonstrates value. If the client says something’s important to them, and you show how that manifests in your quote and in what you’re going to do for them, they’re going to make the value connection.

Communicate Before Quoting

The discovery conversation is where you develop mutual understanding and identify what the client perceives as valuable. It’s where you make a value connection with the customer before you present them with a price.

In discovery, you may find out that what a client says is “really important” isn’t as important as they thought if it costs more money.

For example, many clients at first want to see a large set, or flashy lights, or lots of flare happening when an award is handed out. Any one of these can add several percentage points to the cost of a job. Before you even quote the job, the client might say, “It’s not really that important.”

In the discovery conversation, present the client with value builds. This is where you build value for the client to find out what sticks. Basically, you’re teaching the client where the value lies and allowing them to choose instead of telling them what they need.

To do that, you’ll need to give the client bracketed pricing.

Clients need a scale, a point of reference. You can offer them an example of what you can do for, say, $50,000 to $70,000, and another example of what you can do for $20,000 to $30,000, and find out what best meets their budget and value needs.

Finding out what fit and finish the client wants is part of the discovery process. How fancy do they want it to look? Maybe they don’t want it to look fancy at all. Does it need to be more high tech, or is that just something you want?

You can give clients some bracketed budgeting examples to help them zero in on the value-to-price tradeoff without actually committing to a price.

Of course, we know that in bracketed pricing, clients are going to want a little from bracket A, a little from B, and a little from C. You’ll end up developing a whole new package with more options within the main bracket they choose.

A discovery conversation like this is in stark contrast to just responding blindly to RFPs, which almost always leads into a pricing conversation, not a value conversation.

If you make a quote and throw a price at your client first, you’re missing the opportunity to have these conversations about value trade-offs.

“But what if I still get pushback on the price?”

It could simply be a single-level objection, in which case you need to give them some time to think about it. Give them some space.

But if you somehow lost the connection between value and price along the way, then it’s time to revisit the process. Find out where you went wrong. Figure out where one or both of you misinterpreted the conversation.

Maybe a budget has finally manifested from the client’s point of view. Sometimes the discovery conversation triggers the client to go back to their team and say, “How much do we really want to spend on this?” And now that factor needs to be introduced.

Hearing a price objection more than once on the same project isn’t the end of the world. Look at it as an opportunity to get closer to a final budget faster.

You’ve already done all the heavy lifting. You’ve built the value that’s important to the customer. Now you can talk about trade-offs. Just keep communicating.

About Tom Stimson
Tom Stimson MBA, CTS is an authority on business and strategy for small- to medium-sized companies. He is an expert on project-based selling and a thought leader for innovative business processes.
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