Objection Overuled! 
(Part one of four dynamite suggestions for overcoming price objections.)
By Chris Croner, Ph.D., Psychology

Article Date: July 17, 2006

Price objections are among the most challenging aspects of the selling life.  Objections are as old as the selling profession, but can still be difficult even for seasoned pros to handle.  We have all experienced these objections before: the implication is that the customer will defect to your competitor if you do not make concessions.  Before you throw in the towel and throw out your margin, let's examine why objections occur and how to conquer them.

Marketing professor Michael Jones and colleagues* have found three hidden psychological motives that cause consumers to haggle over price:

1.  Need for Achievement - Individuals who need to achieve feel proud, competent, or smart when they get a bargain.  They may also love to brag about the superior deal they received.  They enjoy competition and see bargaining as a game.  For example, they may work to defeat the auto dealership.

2.  Need for Dominance - Consumers often bargain to obtain a sense of power, viewing bargaining as a sign of virility.  They see haggling as a war against the salesperson or business.  Bargaining is a chance for them to turn the tables and take control.

3.  Need for Affiliation - Some consumers have a strong need to develop friendships and seek acceptance from others.  They may want to earn the admiration of their friends, significant other, or the salesperson.  These are the customers who will bring a friend into the car dealership.

The bottom line here is that haggling serves a psychological need for the buyer, and often makes the purchase more fun (for them).  This is what has kept price objections alive through the centuries.  Now that we know why it happens, we need to handle objections effectively.  Tom Reilly, professional speaker and author of the book Crush Price Objections, had developed several strategies for dealing with this situation.

Here are the first of four of Reilly's top suggestions, and my take on each of them.

1.  Use empathy:  Identify with the buyer's own pricing strategy.  This works particularly well in business-to-business sales.  Use a statement such as, "Mr. Customer, like you, we made the decision to compete on the quality of our product, not the price.  This causes us to lose some business every year, but we gain much more than we lose, and I hope that's not going to happen here."  A customer who also competes on quality will likely relate your point of view on a personal level when he values the same approach himself.

Next week:  "Reality Check" (Are we talking apples to apples?)
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* Jones, M.A., Trocchia, P.J., & Mothersbaugh, D.L. (1997) Noneconomic motivations for price haggling: An exploratory study. Advances in Consumer Research, 24, 388-391.

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