You Don't Have to Drop Your Price To People Who say "We Cannot Afford You"

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Everyone in sales hears, at one time or another: "We cannot afford your proposal."

Sometimes you just have to listen more, as this story shows:

But, sometimes people are objecting to your price. This is at least (2) different types of objections.

1 .The first objection dismisses your solution to their problem.

Your solution doesn't solve anything for them because they don't have that problem. So, they say "we cannot afford this". These people are not qualified to buy from you. You should sell them something cheaper or simply move on.

2. But, the second type of objection -which uses the same words- is different objection entirely.

The need is acknowledged as real, your solution a good one - but, your solution cannot work here and now because we don't have new sources of funding. These people are qualified to buy from you, but they are not ready yet.

Be clear on which type of objection you are hearing.

Responding to the second type of objection can be hard. After the budget has been set, it assumes a permanence that is unrealistic.

Instead, trying asking:

"Well, if we had been considering this proposal at the time we set the budget, what would we have done? What would we have cut out then & what cannot we do that now?"

And, see if you can get away with "we" instead of "you".

1. Most good ideas have to find funding.

2. More money is never allocated in the budget line under: "Good ideas, to come later."

Here is one trick that I know works for franchise vendors: If the franchisor has no more marketing spend, then ask about their training budget.

Many times a franchisor needs an educated or trained franchise owner for the system to work better.

So, ask for some training dollars, put on a workshop, and gather up some interested names/emails.

Follow-up with a nurturing newsletter program. Rinse and repeat with another franchise system.

(Inspiration for article: Buy-In website.)

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We can't afford your program or solution is very different than you're too expensive.

The too expensive means the prospect doesn't see the value fully and we can't afford is we're interested but are budget is committed to something else.

  • user-pic Joe Gordillo | March 13, 2014 6:33 PM | Reply
  • I think Joe Caruso makes a good point. Also, it depends on the context of the conversation. Many times, "You're too expensive," is a value-dividing tactic used by buyers to get you to lower your price. In any case, your best approach is to search for ways to accommodate the client by trading. For example, you might say something like: "I realize we are a premier provider, hence our value is reflected in our pricing. Maybe there is a pathway to getting you a more accessible pricing structure. Can we talk about financing your purchase over a specified time period? Or, can we consider a way to take some elements out of this proposal and insert them into a new one that addresses training? Or, can we use some of your consulting budget to allocate some of the package's items?, Or..." - Trading is the key to coming to a quick and successful close. Also, before you go into the meeting, consider these possibilities so that you have thought-through responses that will enable you to continue to move forward with the client WITHOUT lowering your price.

    And here I thought I was the only one who knew the trick about getting money out of the training budget when the marketing budget was gone!

    But the sad thing about that secret is that it exists at all! Given that successful franchising requires training -- more of it, and of a better quality than most franchisors provide -- it's sad to admit that franchisors have excess funds in their training budgets while they've exhausted their marketing budgets. Is it that they don't know how to spend the training money, or that they don't know that they should?

    Since I've returned to a university to teach I've been surprised by comments from many of my colleagues when they speak about people who have marketing degrees (which I do not). "Well, it's an easy degree to earn and that's why so many of them are looking for jobs." Okay, maybe so. Marketing is easier than training. But that's not a good excuse for a company that takes peoples' money and promises to TEACH AND TRAIN them how to succeed in business.

    This prompts more questions for the update of my e-book: 101 Questions to Ask Before You Buy a Franchise . . . Ask the franchisor: How big is your training budget? And how much of it is leftover at the end of each year? . . . A franchisor that's not wisely investing the training budget may be a franchisor to avoid -- except for suppliers who need to sell them something!

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    About this Entry

    This page contains a single entry by Michael Webster published on October 17, 2014 12:52 PM.

    Death of a Franchise Salesman was the previous entry in this blog.

    Who Are You Forgetting to Thank? is the next entry in this blog.

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