The Number One Cause of Price Objections
by Tom Reilly
Fairness is how you hope the other person will treat you.
Last year, we surveyed 500 people to identify the causes of price resistance. Limited resources, fear, and lack of differentiation ranked toward the top, but they were not number one. The top driver of price resistance was a perceived lack of equity. They said things like, “I want a fair deal” or “I don’t want to feel I’ve been taken advantage of.” Buyers wanted to feel that they are getting at least as good as they are giving. Most defined value as a return greater than the investment.
The equity theory of motivation proposes that humans compare outcomes to inputs. If the payoff is equal to or greater than the investment, the buyer perceives equity and is motivated to buy. Perception plays an important role in the appraisal of value. It is always the buyer’s perception that counts. Perceived inequity results in no purchase.
As a salesperson, you can demonstrate the equity of your solution by demonstrating the short and long-term gains of your solution. Discuss the full value of your end-to-end customer experience. They must enjoy a return on their investment over time. Price is a one-time thing. Customers must perceive your value as an annuity. This way, they experience a return on the investment long after they pay the price to acquire it.