DEALING WITH OBJECTIONS Part One
Before I get into dealing with objections, I received a very good comment from fellow LJ thedude50 that is a very good and important point in closing the sale. When you present your closing statement, many times there will be a uncomfortable silence period. It may feel like several minutes, but rest assured you are nervous and it really is only a few seconds. Sometimes the prospect is digesting your proposal before making a decision. If your prospect is also a savvy sales person they might be doing this on purpose to test you. What ever you do, do NOT say a word. You have had your time to speak and laid your proposal out on the table. Possibly your prospect is thinking it over and this is the time that you need to keep quite no matter how uncomfortable or how long it seems to take. Look at it as if you speak first, you will likely lose the sale. Often times people will get uncomfortable and think they need to say something to their prospect. Reiterate the features and benefits or ask a question. Your prospect has already heard what you have to say and to put it bluntly , this is the time to shut up. I promise you the time lapse is not as long as it feels like it is and it is your prospects turn to speak, so give them the opportunity to collect there thoughts before they do speak. They are either going to respond to your proposal in one of two ways. They will either agree and sign a contract, or give an objection.
The subject of Objections in the sales cycle is very broad so I will break this up into more than one blog.
In a perfect world you make your sales call, deliver a perfect demonstration and close the sale without any type of objection from the prospect. Unfortunately this seldom happens, and in fact, when it does, I would bank that this sale is one that you would have gotten no matter what you did to “persuade” your prospect to buy because this would qualify as one of those sales in the first third that you are going to win anyway.
But what happens when you face objections from your prospect? Many times we are faced with objections that make us want to crawl into a dark corner and hide. But as we can’t really hide, the way we handle objections will make the difference between closing the sale and losing the sale.
Before we discuss what to say when faced with an objection, let me first go over what NOT to say. In no way do you want to respond to an objection that will polarize your relationship. You have too much invested in this stage of the sales cycle to do anything like this because it will certainly cause you to lose the sale. Selling isn’t a contest where if you close you win and your prospect loses. Don’t ever get into an argument with your prospect or say something that will offend or belittle them. This might seem like common sense but I have seen many sales people do this.
About a year ago I was inquiring about health insurance and had a high pressure insurance salesman do this very thing. He made his presentation and asked for me to sign. My response was I wanted to take some time and discuss the proposal over with my wife before I made a decision. At this point it would have been in his best interest to move to “the next step” and establish a time line where he could get back with me after I had time to discuss his proposal with my wife, or better yet, offer to meet again at a time the three of us could go over his proposal together. Instead he made a vital mistake by using a technique that I have read in more than one sales book written by high pressure salesmen. He got this astonished look on his face and said: “Oh, I must have been mistaken; evidently you are not the decision maker in your household. I apologize for taking up your time sir when I needed to be presenting to your wife in the first place as it is evident that she wears the pants in the family.”
The psychology behind this “gimmick” is that by challenging my role as the leader and decision maker for my family would anger me to the point of signing to prove that he was wrong about me not being the decision maker. Instead of signing, he polarized our relationship and lost any chances of making the sale.
Of course this seems obvious but I have seen it performed a number of times.
Secondly and I am going to go against almost every sales book out there by saying to avoid a quick comeback. Most sales books will say to take an objection and turn it into a positive. However; by giving a quick comeback to an objection, we don’t really solve anything because most of the time the first objection is not the root problem the prospect has. It is easy to take an objection as a personal hit against our product,or service. But allot of times an objection is a hidden question the prospect has. Rather than making a quick response to the objection, consider if it were asked as a question, how would you respond? Most likely it would be different.
When selling wood work, generally we are talking high ticket items and often times we run into price objections. But rather than trying to justify your price right away or even worse lower your price, consider asking some questions. You will be surprised at the number of times an objection like “the price is too high” is really not the true objection, but is asking a question on financing possibilities or flexibility in invoicing. Your prospect might be expecting the standard 50% due at signing and 50% due upon completion and asking for installment payments or another form of creative finance options to make the purchase easier.
Under no circumstances do you want to lower your price as soon as the prospect says your price is too high. By lowering your price as soon as you here a price objection only tells your prospect that your initial proposal was overpriced and taking advantage of them. Instead, when you here a price objection, ask a question. I usually start by asking “What price were you expecting?” or “What price would work for you?”
Let’s say for example you are selling a set of kitchen cabinets to a homeowner and you went through the whole sales cycle and asked the appropriate questions, and made a solid presentation and hypothetically you quoted their new custom made kitchen at $7500.00. The prospects eyes get wide and they say:”Gee that is more than we had budgeted to spend.” Then by asking what they were expecting, they tell you they had $6000.00 budgeted, you have a couple of options. I would start by reassuring my prospect that I do not want to pressure them into spending more than they are comfortable and if we go over the proposal together, and list the features and benefits of each of the features of their new kitchen, maybe they can isolate certain features that are not as important to them and thus will lower the price. (Only lower your price by subtracting features and benefits like a lazy susan or style of hardware etc.) If the true objection was the total price, they will usually agree to this, however if the price objection is deeper rooted they are usually reluctant to give up some of the features and benefits they will receive. This usually tells me that the true objection might not be the price at all but the payment terms and by offering some flexibility in deposit amounts and draws will lead to closing the sale.
Sometimes when dealing with Kitchen cabinets, you will run into a price objection based on the price offered by large box stores like Home Depot. This is where you can justify your price by pointing out the quality of materials used and also point out that the price they often receive from the box store might not be including all costs such as installation and delivery, and as they are factory mass produced cabinets, there are allot of extra costs in filler pieces that will be required in installation. However; if you asked the proper questions in your interview stage and made a solid presentation of your product, this objection should have came out before you reached the closing stage.
If at all possible, try to avoid pricing objections at the closing stage by naming the price or even an estimated price early in the sales cycle. If you make and sell a tangible item that you mass produce this is easy. However if you are selling kitchen cabinets or another type of commission woodwork it is hard to give a final quote until you receive all of the information you need in the interview stage. But if you throw out a ball park figure, like a basic price for a custom made kitchen in red oak is X dollars per foot, this will take some tension off your prospect and they often times realize your price is more affordable than they originally thought. They spend more time giving you the proper answers to your questions and listening to your presentation than worrying if the price is going to be too high. Also by giving the price early in the sales cycle, you can overcome pricing objections before you get to the closing stage.
A few months ago I went to give a presentation to a funeral home. Oddly when I arrived and we went through the initial greeting and hand shake and I touched on our conversation during the Cold Call two days prior, he claimed he didn’t remember talking to me but had a note on his calendar of an appointment at that time and did not know what the meeting was about. So I started by giving my 30 second commercial on my company by saying: “Mr. Prospect, I own Showcase Custom Caskets located here in Greensboro and we specialize in handcrafted wood cask….” Before I could finish my first sentence, He held up his hand to stop me and said: “Usually when I hear the word “Handcrafted” that tells me they are too expensive and I can’t afford them.” At this he started to get up out of his chair as he assumed the meeting was over. My reply was simply: “Mr. Prospect, many funeral directors in this area have had the same concern over our pricing, however; we have been working with ABC funeral home and Kevin (last name) over there has assured us that our pricing is competitive with mass produced assembly line caskets and has had great success in marketing our products on the benefit of hand craftsmanship and the appeal of selling a locally produced product. In fact as the average wholesale price of our caskets are $1300.00 and some models as low as $900.00 I believe you will find that we are not only very competitive in the wood casket market but are also competitive with the cost of steel caskets.” At this he sat back down and we continued the meeting.
Now take this particular case as an example. By pointing out that others have had the same objection, I show empathy to his concern. I let the prospect know that this is a common objection and he is not alone in thinking this way and I used a success story to neutralize the objection. Obviously if I had come off with a quick knee jerk response like “How do you know it will cost too much if I haven’t given you the price yet?” would polarize the relationship before it had even started.
A common response you will also hear is “I need to think about it.” This response is extremely common. Get use to hearing it allot. Like I said before though that many times when a person gives an objection, what they state as an objection and the true objection is not the same. The true objection might be a fear of changing the status quo or fear of taking the chance on someone they are not familiar in working with. There might be a fear of how the change will be accepted by a boss or their peers. These types of objections can be surfaced to the true objection but it takes a little patience on your part. Do not pressure the prospect into making a decision they are not comfortable. This is not a way to make a prospect a customer and then develop that relationship into a partnership. When I hear the “I need time to think about it” objection, I accept their wish to have some time. I then establish a next step. Do not tell the customer to think on it and call you in a few days as chances are they get busy and don’t call and you lose the sale. How I handle this is to establish a time line. I usually tell the prospect that I can respect their desire to think things over, and I we will meet again. Then I set another appointment in person for a few days, say 4 maximum. (I avoid setting follow up appointments as phone appointments because by conversing on the phone, you are not able to read body language and as we discussed in yesterdays blog, the majority if conversation is through body language rather than verbal) At this point if the objection is truly they want to think on it before making a sound decision they will agree to meet again. If there is another underlying problem though they will be reluctant to set the next appointment.
Last week I gave a presentation to a new cremation service in town. During the interview stage, I learned that the company had been advertising and prospecting for nearly a year, but had only had possession of their funeral license for three months. I was giving my presentation to the owner. She seemed very enthused about my product from the time I had first made the cold call and all through the sales cycle. I hadn’t even gotten to the closing stage when she stated, I really like the artistry in your designs. Most cremation urns made from wood are just boxes and they all look the same, but these are unique. All through my presentation she never gave any objections. However when it came time for the close, I gave my proposal to what I had to offer and what terms I was willing to extend in invoicing. She already knew the price during the presentation stage and hadn’t given any pricing objections, but at this point said, “I know I want to buy from you but would like to take a few days to think this over before selecting specific urns.” I replied that I could respect that and as this was a Thursday, I suggested she take the weekend and why don’t we meet again on Monday at 10:30 am. She replied that the following Friday would be better as the front of the week is usually busier for her. So we set a new appointment for today at 3pm.
I usually don’t like to give this amount of time between meetings at this stage but didn’t want to pressure her. Just to keep the thought fresh in her mind, I stopped into her office the following Tuesday with a new style Urn I had finished over the weekend. She was very receptive of the design and asked the price. I told her it was $150.00 and suggested that she go ahead and set it on her display to see how the public would perceive it. She declined and stated she better wait until we meet on Friday. Then based on the information from my interview stage and knowing she was just starting a new company, I thought maybe the real objection is a cash flow issue and she needs flexibility in invoicing so I told her to go ahead and set it on her shelf and she could pay me for it later. At this she brought out the real objection. She has a silent partner who is financially backing her and she did not want to make any purchasing decisions without him present and he was out of town until Friday. Now we are at the real problem. So by allowing her time to set up an appointment with the person providing the financing, I still have the opportunity to close the sale. Imagine what would have happened if I pressured her into a decision she wasn’t going to make in the first place? I would have polarized the relationship and lost the sale.
How did it go at this afternoons meeting? I can’t tell you. The financial backer got delayed in coming back into town and we had to reschedule for next week again. But the sales cycle is still moving forward.
When dealing with any type of objection. It is important to realize that often times the objection that the person states is not the brass tacks true objection but a convenient reply. My prospect had stated that she needed time to think, however the true objection was waiting for approval from a business partner. Why do people respond this way and why don’t they just come out and state a true objection for what it is? I guess there could be a number of reasons, embarrassment, not wanting to give too much detail of their operation, it really isn’t important as to why, but how you respond to it. By asking appropriate questions and building trust is the only way to effectively build lasting relationships with your clients which will lead to more future sales.
Tomorrow we will continue on the topic of Objections and how to handle specific common objections you face in the sales cycle.