End of Qtr/Year Price Objection

It’s happened to most of us in the enterprise software sales marketplaphoto_duncanlawce.  You’re in the final review meeting.  Your proposal has been verbally agreed to, and your prospect pulls out the “higher authority” objection mentioning that the CFO or someone wants/needs a price concession.  Your commission statement flashes before your eyes (without this deal!).  The poker game begins.

Strategic sales excellence dictates that you calmly address the objection directly with questions to expose the issue.  For this example, we will assume it is purely a gambit to get a better deal.  I have used different combinations of the following with good results.

In any case, it is time to review the key value points your solution will deliver and quantify the pain that will be addressed.  It is important, during this review,  to gain agreement throughout the discussion on each point.  If you don’t, you haven’t finished selling, and you have missed something in your process.

Now the fun starts.  If you are extremely confident, you can employ a soft version of the “take-away” close which goes something like:

“Bill, I’m sorry we seem to be on different planes, here.  Based on the value we provide which addresses your issues at the price we discussed, I expected we would proceed as planned.  I can only wonder if perhaps our solution isn’t the right one for you.  What do you think?”  He who speaks next loses.  “Bill” won’t concede at this point, but you have shifted the negotiations to a different level, and taken a much more powerful position from which to negotiate a settlement.

Another approach for those of us in the SaaS/subscription world, is to suggest a compromise.  Consider offering to extend the subscription by one month, in return for accelerated payment terms. You need to get something in return for the implicit discount of the 13 month subscription and full price on accelerated terms makes the finance department happy. 

One final approach, and the one I like the least, is to agree to a lower price in return for a reduction in services.  This approach puts the long term relationship at risk because your solution may not be used in an optimal way, and the overall value may be compromised. 

What’s your favorite/most successful approach?

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One Response to “End of Qtr/Year Price Objection”

  1. Barry Zweibel Says:

    Hi Duncan ~ From the “customer/prospect” side what you speak of isn’t a gambit – it’s a test … a test to see just how committed salespeople (and vendors) are to thinking more creatively, working more diligently, and optimizing the deal on behalf of the buyer. Besides, so many salespeople DO negotiate on price, it would be irresponsible for a buyer to NOT ask for a better deal.

    But buyers don’t mind sellers making money off of them – they just don’t want sellers to make MONEY off of them. (win/win, versus win/WIN.)

    Of the three options you featured, Option Two resonates best for me. After all, not all things cost the same to a seller, and not all costs mean the same to a buyer. In recognizing that, and putting it into play, a salesperson demonstrates that s/he truly IS thinking more creatively, IS working more diligently, and IS optimizing the deal on behalf of the buyer … and seller alike.

    And that makes it much easier for a prospect to sell his/her boss on the merits of the solution at hand.

    Would that there were *more* salespeople that applied this dynamic to their work.

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