With my 12-year experience in sales and marketing and hundreds of interviews with many sales persons (for my upcoming book Onion Layers), I can say with great surety that there are two most common objections from customer in B2B sale, that every sales person face: –
- There is no budget
- Your price is too high
Have you ever thought, what is the root cause of these two objections? What is said to you as objections are simply a statement, not the real problem. At least for the first objection (There is no budget), this is completely explicit. If you don’t agree with me, let me know, why the customer was wasting his own time too discussing with you, if there was no budget? Don’t you think, you can handle these effectively, once you know the real problem,
With help of many experienced and successful sales professionals, I designed a concept called COMM (Customer Objection Management Model), which I would like to share with you.
What is COMM?
COMM is a model to manage customer’s objection effectively. This works in different stages. Philosophy behind this model is-
“There are certain common objections, which are often raised by customers. Sales persons should not wait for the objection to be surfaced for his actions. But they should foresee them and take actions to damage grounds for such objection.”
Still, objections will be raised for sure, but either you will already lessen the intensity of objection or you will be better prepared to handle it. Following are the stages of COMM
Step 1: Develop a positive mindset for objections
This is the first and foremost part of any objection handling. I had seen many sales persons, who gets disappointed with such incidences. My friends, think for a while, if customers would have no objections, why you were hired? Rather than hiring sales persons, companies could have gone for taking services of call centers. They could collect orders and place with companies.
Step 2: Find the right person for budget discussions
Budget is the most critical information, that sales person has to dig out and so it actually needs a skill and practice. Generally, sales person have got a bad habit of asking critical information from most convenient person than the most appropriate person. Now question is how to know who is the right person for taking budgetary decisions? Have a look at following tips: –
- Your first point of contact in any company has got lowest decision-making powers (This is not universal truth. Smaller organizations can be exceptions)
- But your first point of contact can open all doors for you, if you handle him/her well
- Don’t ask questions like “Who is the decision-making authority here?”. No one likes to accept that they don’t have such powers
- Ask questions like “Please take me through your decision-making process, so that I can place right value with right person”.
- Look for persons at executive rank or higher level, who generally have got such authority
Once you find the right person, you can avoid the first objection that they don’t have budget. And if there is no budget at all, you will get to know at an early stage and avoid wastage of time and energy.
Step 3: Develop you own price model first
Price discussions use to be the worst nightmare, which every sales person want to avoid. But if you think deeply, this is the only discussion, where things are not shaky but fixed. You know your margins and so you know your limits too, below which you can’t go. Following are the tips to avoid price objections or otherwise to handle them effectively: –
- Develop your own price model first but do not reveal it
- Don’t keep your prices too high, as it will undermine your credibility as vendor. This should be a win-win situation for both
- Simultaneously don’t keep your price too low, as you will not have any room for negotiation
- Ask questions to know budgets. This is certainly difficult and needs practice. Such questions should not be asked as a direct to the point question, but with some supporting values. For example- “As I would like to put a proposed solution that’s should meet your organisation’s need, please let me know your budget”.
- Still, if customer is not ready to reveal budget, propose price slightly higher than your lowest limit, as customer will certainly take you through a round of negotiation.
Step 4: Show personal values
Always remember that your product is not purchased by company, but by the person sitting on chair before you. Every sales person talks about return on investment for organization, but forget to talk about value for the person on the other side of table. I would like to make it clear that I am not at all talking about any malpractice like bribery or gift. So, what are the values, you can create for the person? Simply ask below written questions from yourself and you will get the answer: –
- Is my solution saves time of this person or his staffs, which they otherwise can utilize for their family or for relaxation?
- How my solution makes process easy for him or employee of this organization, that he can be a highlighting feature in his performance?
- Can I show him a cost advantage with my solution over the existing vendor’s, that he can highlight in his KRA?
- Can a process improvement with my solution be helpful in his promotion?
There can be many of such questions, based on your situation. If you can show personal values to the person, not only you can build strong relations with your client, but also he/she will themselves be interested in installing your solution.
Step 5: Handling price objection effectively
After all your efforts and care, price objection may arise. Then what should be done? Following tips will be helpful: –
- Try to find whether price objection is simply raised by customer or is influenced by any competitor in picture. Good relationship with gatekeepers can be very helpful in getting information.
- If price objection is simply a shot in dark to get some more price advantage, be patient and wait for some time, while maintaining a string of discussion. After some time, everything will be resolved.
- In case it is due to competitor, find some edge over rival’s solution and highlight it. In case you are sure about better quality of your product, such statements with explanation will be helpful- “You have to take decision, you can go for a lower cost solution, but that will not solve issue in achieving (Key Outcome) that you said as desired.”
COMM is not giving you a 100 % guarantee to crack the deal. There are many facets of customer interaction, that are beyond COMM. If after all efforts and price offerings, that you can, you will not get orders, make it a case with help of your technical team and analyse, what is lacking and need improvement e..g quality, price, lead time etc. You may have to put pressure on back end operation (Purchase and production) for cost reduction and better quality. Through this way, you can contribute significantly in development of your organization.
Hope these tips will be useful for you. Readers are invited to put their experiences in customer handling in comment box. This will enrich everyone’s knowledge and improves skills.