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Handling pricing objections

So you poured in hours of hard work. Sold the solution to the right person and you have finally gotten to the last stage but your prospect wants to talk money. Does this excite you or make you nervous? Or maybe both?

Consultative selling as a technique ensures that you don’t have to face many price objections but it does not guarantee that you won’t come across pricing objections.

Always build a proper business case to avoid last minute pricing objections. Nothing hurts more than losing a well nurtured opportunity on pricing in the end.

Our experience has shown that pricing objections are basically of 2 types.

Insufficient value

Almost 90% of pricing objections fall under this category.

Most of the time a prospect is asking you for a discount because they fail to see enough value in the product. Hence, they find the product overpriced or not worth the price tag. Handling insufficient value objections is a little tricky and you may end up over discounting. However, with a little practise and determination you can overcome these.

Budgetary Concerns

The market is tough and the days of unlimited budget are gone. Unless you are part of a very niche selling team, you will face budgetary concerns from time to time. These require experience and skill to handle over a period of time.

Step1: Uncovering the real objection

So let’s start with a typical scenario, your prospect Mr. Smith (apologies for the lack of creativity) has had enough time to analyse your offering and wants to talk pricing.

Mr. Smith understands what the product can do for him but when it comes to pricing is not convinced.

Let’s play out a typical scenario: So Mr. Smith you mentioned that the pricing was a concern for you. Can you let me know what your concerns are?

Mr. Smith: Sure, I find the product is pricey. We need something more economical. Okay, I will be happy to discuss pricing. But before I do that, can I ask your experience of the solution has been so far?

Mr. Smith: Well it’s been good actually. However, the downtime involved in switching people from server A to server B is really high. I understand. Anything else?

Mr. Smith: Not really that is about it. Okay, and how much of a blocker is the down time issue you mentioned?

Mr. Smith: It did get mentioned in a few evaluation meetings. I think it is a deterrent. I can understand that Mr. Smith. I believe that the product’s pricing is not the real issue here. If I could do something with the down time issue? Would that alleviate any pricing concerns you have?

Mr. Smith: Actually that might work. Why don’t you get back to me with something?

The above scenario could have gone many ways. If Mr. Smith was not really bothered by the down time issue but was simply fishing for a discount you would know.

In which case you could go back with a line like:

Mr. Smith, I see that your evaluation has gone well. I see you have no major issues with the solution. Can I ask why you still need a discount?

Our experience has shown that the above question usually catches the prospect off guard and elicits a genuine response.

In most cases, you will be able to differentiate a genuine concern from a simple fishing exercise for trying to get a discount.

Step 2: Handling insufficient value concerns

In the above scenario there is a possibility that the prospect may actually not find anything wrong with the product but still feels the price tag is not justified. In these cases it is always a good idea to go back to the basics. Work on the solution pitch again and demonstrate the value associated with the product.

As a principle a good sales individual will never discount. However, if your product ticks but is missing out on a few features, you might consider a discount after you have handled all value concerns.


The only reason a pricing discussion happens is because the prospect is interested in buying in your solution. No one talks discounting if they are not interested in the solution.


Step 3: Handling budget concerns

Well if you have done part one of this blog correctly and gotten to this phase then the good news is that you are about ready to close this sale. Having said that, you might have to end up dishing something out from the overall value of your sale to get it.

Budgetary concerns are not easy to handle. However the best way to approach them is to be upfront and ask questions like:

“Can you let me know what budget has been assigned for this project?”

Depending on your gut instinct you can then decide how much of a discount to offer your prospect.

You don't have to always match your prospect's budget. Your pricing is probably on the website which means he already had a decent idea of what your solution will cost.

It is just a case of meeting him in the ‘middle’ sometimes. In other cases you can get away with no discount at all.

What is important is to understand every sale that had last moment budgetary concerns.


Handling budgetary concerns is not a one day affair. It takes experience and be prepared to get it wrong.


To summarise, don't close the door and always keep an open dialogue with your prospect.

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