Perhaps the most misunderstood skill of the sales profession is responding to and handling objections. It often is so misunderstood that in many books by so-called experts on the subject of sales it is listed as a step in the process that is expected to take place after the presentation process. This implies that the salesperson should either ignore objections until after his or her presentation or, worse yet, assume that the presentation itself will create objections that were otherwise absent.
Mastering this skill of “overcoming” objections by customers is the topic I am most frequently asked to address at training seminars. Salespeople assume that there is something they should be able to do in response to objections; the implication being that if you overcome the objection and achieve a sale, you have succeeded; any other outcome is failure. However, the truth is that there often is nothing you can do to change a prospect's feelings. Sometimes you will be able to change your customer's mind. In many cases, you will discover that your customers' objections are legitimate or otherwise insurmountable. The simplest way to build a successful relationship may be to sustain your customer's objection. Your short-term loss may become your long-term gain.
The expectation that there is one best response to any objection is a fallacy. Every situation and person is different, and a multitude of responses are available to any given situation, some of which are more apt in some cases, while wholly inappropriate in others.
For example, a prospect may warn that your company “had better be ready to take care of any problems that arise in the field.” Ask yourself what your response to this statement might be. Most salespeople would quickly launch into a diatribe about the qualities of their customer service department and the excellent after-sale service record of their company, which in this case would do little to ease the concerns of the prospect.
Assume that the prospect is permitted to explain that their current supplier has had many problems servicing a product due to complications arising from the manufacturing process. In other words, the problem really isn't a service issue; the problem is a product quality issue. A Sales Leader recognizes that the first task in this situation is to understand why the statement was made in the first place. When you understand the motivations for the prospect's concern, you can choose the appropriate response.
With this knowledge, you can then identify several possible responses. In this particular case, you can discover which product issues are problematic for the prospect. You also can determine whether your product will resolve the problem. Using this discovery process, it's possible to educate the customer with a presentation or provide a reference from a satisfied customer. Another option might be to make a bold guarantee that the first order will be dramatically discounted if any product deficiency delays the production schedule. You might discover that the prospect's expectations are unrealistic. Try to manage those expectations; if you can't, the best option is to accept that an immediate sale is not likely.
Higher Ground The skill of handling objections requires you to achieve lofty levels of consciousness. Fear and anger are low levels of emotional consciousness from which most salespeople react to challenging situations. Sales Leaders respond with the loftier emotion of courage. The better response to objections is always the more courageous one. This is true whether the issue is something as mundane a product's shade of white or as intense as pressure to reduce pricing, a subject that bears special discussion.
A “price” objection, like many objections, is often symptomatic of bigger problems in the sales process. It rears its ugly head when salespeople move too fast, failing to adequately understand the customer's needs. It is an objection also made because trust has not been established. The problem for salespeople is they fail to realize that price concessions often do more damage than good to a business relationship.
The first problem is the obvious one—loss of profits. Most businesses operate on very slim margins, sometimes striving to manage only 3 percent to the bottom line. Most salespeople fail to realize that a 1 percent price concession is not merely a 1 percent reduction in price, but is rather a 33 percent reduction in profits to a company. In other words, if a company earns only $3 per $100 of revenue, then a 1 percent reduction reduces earnings to $2 per $100, a loss of 33 percent of company profits. The chain-reaction effects are a reduction in operating capital and potential resentment from the supplier toward the customer, particularly when the customer expects extraordinary levels of service support while demanding lower prices.
When a customer objects to price, you must establish cost levels that satisfy reasonable expectations while simultaneously protecting the profitability of your company. In most situations, the best, most courageous response you can offer is to politely inform the prospect that they “already have the best price.” This establishes a new level of respect and power in the relationship. Moreover, you will discover more happiness and satisfaction in your career with no damage to the quality of your business relationships.