Countering the Price Increase Objection
So, you’ve just raised prices, and two minutes later, you get a price increase objection. What do you do now? Let’s dive into how we can counter the price increase objection effectively.
Understanding the Customer’s Perspective
It’s natural for customers to feel frustrated about rapid and steep price increases. To empathize, think back to your own experiences. Remember when a candy bar cost $0.20 or a movie ticket was just $3? Today’s prices can feel overwhelming, and no one likes sudden hikes, especially homebuyers. The increase impacts them in two significant ways:
- Fear of missing out on the lower price.
- Higher monthly payments.
Of these, the primary concern is missing out on the lower price. A customer who sees a $5,000 increase might focus on the fact that they could have paid $5,000 less a few weeks ago. That’s where the price objection stems from. So, how do we handle it?
Shifting Focus from Past to Future
Start by offering perspective. Yes, they could have paid less if they bought earlier, but that applies to almost every purchase we make. The real question is whether the value is there today. We need to shift the customer’s focus from dwelling on the past to looking forward to their future.
Highlighting Benefits
One way to achieve this is to highlight the benefits for those who bought months ago. For instance, point out that those who purchased three or six months ago also faced concerns about higher prices. Yet, they’ve seen their home values increase by thousands of dollars. Use this to show that while prices have gone up, those buyers are now in a better position.
Reframing the Price Increase
From a financial perspective, reframing is crucial. Warren Buffett famously said, “Price is what you pay. Value is what you get.” Instead of focusing on the price increase, emphasize the value they’re getting. The key is to ensure that customers see the value in their new home.
For example, if the price of a home increased from $550,000 to $560,000, it’s a $10,000 increase. But does that represent a significant jump in percentage terms? Probably not. More importantly, it’s unlikely that a customer who saw value at $550,000 would no longer see it at $560,000.
Breaking Down the Monthly Payment
Another strategy is to break down the price increase into monthly payments. Rather than saying the price went up by $10,000, tell the customer it’s increased by a certain amount per month. For most buyers, a $10,000 increase translates to roughly $60-$65 more per month. This is comparable to a fast-food dinner and a movie – without popcorn. It’s a manageable amount and less intimidating than the lump sum increase.
Keeping the Focus on the Future
The most important part of overcoming price objections is to keep the customer focused on their future. Help them visualize how great their life will be in their new home. Reframe their concern from the past price to the future value and quality of life.
By understanding and empathizing with customers’ frustrations, offering perspective, highlighting benefits, and reframing the increase in practical terms, you can effectively counter price objections. Focus on helping customers see the long-term value and future benefits of their investment. Remember, it’s all about changing their perspective from past regrets to future gains. Happy selling!
