Overcoming Pricing Objections: How to Close Deals Without Discounting

Pricing objections go beyond a simple disagreement over cost. They rarely suggest disinterest or budget constraints, nor do they necessarily reflect a lack of showcasing product value. 

In fact, they often conceal deeper concerns.

Approached strategically, these objections can reveal valuable insights into prospect needs and preferences, empowering you to rig the deal in your favor.

Learn how to leverage pricing objections to your advantage and ensure you never lose a deal to your competition.

Want to cut to the chase? Get our premiere online course to learn how to rig the game and box out your competitors from the negotiation.

7 things to do before entering the pricing negotiation stage

Most sales professionals become subservient to their customers because they need a better sales process.  When they begin negotiations, they get kicked around and give away on price because they neglect these crucial sales tips before negotiation: 

1. Generate product urgency by pinpointing pain points that align with financial priorities
2. Eliminate the competition by rigging the buying conditions in your favor
3. Become your customer’s vendor of choice
4. Complete all the groundwork before price discussions
5. Bring your champion to the negotiation table
6. Have a walkaway limit
7. Define the business value context before talking price

1. Generate product urgency by pinpointing pain points that align with financial priorities

Negotiating with a buyer facing the urgent need to prevent a significant valuation loss due to a cash flow issue is more manageable than dealing with a buyer seeking enhanced visibility for improved sales coaching. 

The reason is because the buyer in the first scenario is motivated by a critical financial challenge that directly impacts the overall health of their business. The tangible and immediate consequences of not addressing these issues create a sense of urgency that can facilitate a more favorable negotiation.

Conversely, the urgency in the second scenario case may not be as palpable, making it potentially challenging to align on immediate and decisive actions during negotiations. 

As you can see in the chart above, the more questions you ask in the discovery, the more clarity you derive about the prospect’s needs and the challenge going on in the buyer’s business that’s driving the solution to be a priority. That way, you get to focus on negotiating deals destined to close. 

👉 Start closing more deals with this free list of discovery questions that sell.

2. Eliminate the competition by rigging the buying conditions in your favor

Most sales professionals don’t know this, but it is important to successfully win over the buyer by positioning your product/deal as the ideal option to fulfill the following three buying conditions:

• The buying criteria 
• The buying process
• The buying committee

Fulfilling these conditions is the foundation of competitive selling. It is how your sales reps win your unfair share of competitive deals. 

Here’s a short role-play of how Chris Orlob rigs the buying criteria to sell Gong, blowing even the most fierce competitor out of the water. 

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3. Become your customer’s vendor of choice

You should never engage in price negotiations without, first, establishing yourself as the top choice for the customer’s needs. 

If you try to close a deal when the customer still doubts whether you’re their ideal vendor, you’re creating a painful race to the bottom.

The importance is clear:

• The customer will haggle over price,
• Pit you against your competitor,
• And push you into a scenario where the winning vendor is the person willing to give away the most on price. 

You don’t want to be that salesperson. 

So, before entering price negotiation, ask this question: “If price were not an issue, would you choose to move forward with us?”

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If they say yes, now you can start negotiating on price and game on. 

If they say no, then your next question is: “Well, what steps do we have to take to confidently get you to a point where you have chosen the vendor of choice?”

That way, you’re not just applying a consultative selling approach but also avoiding wasting time on a deal that will break down. 

4. Complete all the groundwork before price discussions

“When is the right time to start price negotiation?” We get this question every time. 

And the answer is simple:

Don't negotiate until price is the last issue– that, if resolved, would get the deal done. 

Aside from ensuring that you’re their vendor of choice, you want to be clear on the groundwork to be done in order to get the deal signed. 

Before discussing price, ask this question:

“Let’s say we agreed on price right now, what steps would you still need to take or would your company still need to take before we decide to move forward with a commercial agreement?”

And the customer says there has to be some legal review, procurement review, and executive sign-off. Your next move is to take a step back and help them understand why it is crucial to cross out these stages before price negotiation.

5. Bring your champion to the negotiation table

This is important when negotiating with procurement– who are often focused solely on driving down prices. The sales champion serves as a voice of reason who comprehends the intricacies of the business value at stake.

While challenging, the potential benefits—such as substantial savings and avoiding significant discounts—are well worth the effort. Even if success is not guaranteed, the impact when it works can build value in the long-term.

6. Have a walkaway limit

Defining the point at which the deal no longer makes sense for you should not be a spontaneous decision made in the heat of the moment during a negotiation session. Attempting to improvise your walk-away limit under pressure is likely to lead to mistakes.

The most effective negotiators take a proactive approach. Before stepping into the negotiation room or sitting at the negotiating table, they determine their walk-away limit in a calm and collected state of mind. 

By establishing this limit upfront, well before the actual negotiation takes place, you ensure that your decisions are grounded and strategic, minimizing the risk of making impulsive choices during the intensity of negotiations.

7. Define the business value context before talking price

Don’t dive in. Initiate the negotiation session by outlining the business value context in 60 seconds at most. 

The key is to avoid negotiating in a vacuum. 

Most tech sales teams and SaaS sales professionals hastily dive into negotiations, immediately focusing on price without providing a broader view of the business value at stake.

This approach creates a reactive approach to negotiation where you have to double-back each time to present the broader picture. 

Rather than starting the negotiation with discussions on price, begin by requesting permission to spend a brief moment reviewing the business value. This approach ensures that everyone involved is aware of the broader context and stakes involved in the negotiation. 

Such framing not only alters the dynamics of your negotiations but also allows you to consistently refer back to the business value context as a means to defend your pricing decisions throughout the negotiation process.

How to handle pricing objection: The exact talk track that we used to grow Gong 

Follow these exact steps to successfully handle pricing objections:

1. Isolate the price resistance
2. Problem-solve
3. Gain clarity on the buyer’s desired outcome
4. Show your product’s competitive advantage
5. Illustrate the point of inaction
6. Offer options and guarantees in exchange for other commitments

1. Isolate the price resistance 

This means that you simply break the price objection into one of three buckets in order to understand the root cause of the objection. As soon as the buyer raises the price discussion, use this talk track as a rebuttal:

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What you just did is that you made the customer concede their stronghold by admitting to a specific reason why they are objecting to price. 

Psychologically, they just invited you to sit on the same side of the table with them– which is what you should always try to do in a negotiation. 

2. Problem-solve

Now that you understand the specific reason why the prospect won’t buy, problem-solve by asking a bunch of follow-up questions or educating the customer, depending on the reason. 

Consider these options:

• If the customer is not sold on the business value (the first option), do a discovery or just educate them on the business value that you've discovered with other people so far. 
• If the customer objects to the price for a logistical issue, ask a bunch of questions to better understand that logistical issue. 
• Are they going through a new fiscal budget cycle?
• Do they have enough cash for half of it now and half of it later? 
• Would they prefer semiannual payment terms? 

In either case, you are logistically problem-solving the issue. You wouldn’t know this without isolating the price objection into those three options.

3. Gain clarity on the buyer’s desired outcome

As a sales person, you need to know what the buyer thinks is the source of the problem, how they want to solve it, and what the desired end-state is. 

If the buyer is still hesitating, another thing you can do is to work with them to define what success looks like.

• Empathize with them by showing you truly understand their struggles and why they want to reach that ideal end-state.
• Educate them on how similar clients who previously struggled in the same position are now enjoying the benefits of making the best bets for their company.
• Influence the buyer to make that bet with you by revising your product’s value proposition. Then, map those propositions back to the customer’s vision of their ideal state. 

4. Show your product’s competitive advantage

It’s a tough place to be as a sales person– when you have to describe why choosing you over your competitor is the best choice, especially if pricing is the subject of comparison. 

That’s why we teach sales professionals to ensure the buyer already makes them the vendor of choice and rig the buying conditions in their favor before price negotiation. 

There are several ways to talk about your competitors that guarantees your buyer never thinks about them again. Here’s one:

• Share your strategic narrative. Describe a major change in the world (or industry) that necessitates people like your buyer to choose your product over the competitors. Think how companies shifted from chatbots to live chats because customers were used to having real-time conversations.
• Explain the unique features that companies facing the same problem as your buyer love about your product. 
• Share customer success stories/testimonials with specific focus on the ROI those brands are getting and what it feels like to efficiently achieve their desired outcome.

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5. Illustrate the cost of inaction

If you notice the buyer is sold on the value of your product but either wants lower prices or wants to sign off on the deal at a later time, showing them the cost of inaction is your best move. 

This technique involves opening your customer’s eyes to the hidden cost of not making the financial commitment needed to close the deal. 

See the example below from a real-life negotiation where Chris Orlob negotiates a $50,000 SaaS deal with a Head of Sales who wanted to move forward but wanted a better price. 

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By highlighting the cost of inaction:

• You help prospects understand the potential losses they might face by delaying their decision.
• Create a sense of urgency 
• And make the price objections seem less significant. 

6. Offer options and guarantees in exchange for other commitments.

Should you offer options and guarantees such as discounts or freemiums? There is no agreed answer to this. But the dominant opinion is that sales professionals should not offer discounts as it undervalues the product. 

While that might be true in certain contexts, offering options and guarantees can be the deal-closing move if you play your cards right on a sales call. 

First, you must not exceed your walkaway limit. We talked about this in the previous section. Secondly, you must get the buyer to offer extra commitments for every option and guarantee they demand. 

That means, every time you’re willing to give something to a customer; whether it is you agreeing to a legal term or any other agreement, get something in return. It almost doesn't matter what the thing is. 

• You can ask for longer contract terms
• You can ask for a case study
• You can ask to remove a clause in the contract

What you really want to achieve is to slow down the customer’s pace of asking for concessions like lower prices. You want to teach them that every time they ask for something, you're going to get something, too. 

That way, offering a discount or any other option is not done to make the customer choose you. Rather it’s done to balance the deal in sales conversations so everyone wins (so the customer becomes someone you want to choose too). 

If you give in every time your customer asks for something and you don't get something in return, you're feeding a dragon. And dragons only get hungrier the more you feed them. 

How to respond to 5 most common pricing objections 

When the customer says “it’s too expensive”

Here are 4 techniques to handle an objection when the buyer says you’re too expensive.

Solution 1: Isolate and problem-solve the price resistance

Use this talk track:

Solution 2: “Compared to what”? 

When buyers say you’re too expensive, it means the customer might already have an idea of what a fair price is (based on market research). You don’t want to concede to the buyer’s opinion without understanding what expensive means to them. 

So, when the customer says you’re too expensive, simply ask: “too expensive compared to what?”

That way, you can find out what the prospect is comparing your product or service to and can more precisely differentiate value.

Solution 3: Empathize and illustrate the value that comes with a higher price tag

Acknowledge the customer's concern about the perceived high cost. This helps build rapport and shows that you are attentive to their needs.

After that:

• Demonstrate product knowledge and show how choosing your product over a similar product, despite its higher price, translates into tangible returns or cost savings for the customer. 
• Shift the focus from the upfront cost to the long-term value your product brings. 
• Emphasize how the initial investment is a strategic decision that pays off over time through increased efficiency, reduced operational costs, or other lasting benefits.

You can also make a stronger case by sharing success stories and testimonials from other clients who initially had concerns about the cost but later realized the substantial value and positive outcomes achieved by choosing your product. 

Solution 4: Offer a free trial

Use this talk track: 

When the buyer says “we don’t have the budget now”

Solution 1: Offer a flexible payment plan

When a buyer says they don’t have a budget, it often implies that they like your offer. You have to take advantage of such budget issues. 

A good way to do that is to offer a flexible payment plan. This is an important sales strategy.

You can say: "I understand budget constraints can be challenging. Let's explore a flexible payment plan that aligns with your current financial capabilities. How does a phased payment approach sound? We can adjust the payment schedule to fit your budget."

By creating flexible payment plans, you reframe the problem and make the decision easier to get that credit card out and close deals.

Solution 2: Ask when budget will be available so you can circle back

Acknowledge the customer’s interest and ask when they are most likely to have a budget. 

You: "I appreciate your honesty. Knowing your interest, may I ask when you expect the budget to be available? This way, I can follow-up at the right time and we can move forward efficiently."

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👉 Related: How to follow-up on a sales proposal without being annoying. 

When the customer says “we need to think about it or get approval from someone else”

Solution 1: Get the buyer to recap the approval process

Use this talk track: “I understand the importance of this decision. Could you walk me through your approval process? 

Understanding it better will help me provide any additional information you might need.”

Solution 2: Present a hypothetical situation to understand what the buyer would do if approval was not an issue. 

Use this talk track: “Of course, that makes sense. Just out of curiosity, if approval were guaranteed, would there be any other hesitations or concerns from your side?

Understanding this helps us ensure we’re fully addressing your needs.”

When the customer asks for a discount

This is one of the most common sales objections. To overcome objections like this, especially in situations where you can’t offer a discount, you can offer them extra value in place of the discount. This can come in any form that increases the value of the product. 

For example, you can say: “I understand the appeal of a discount. What I can offer, though, is additional value. For instance, if we agree on the terms today, I can include an extended service plan at no extra cost. How does that sound?”

When the customer says your competition is cheaper

The solution is to show the competitive advantage:

• Explain why your price tag is fair 
• Explain what you have that X competitor doesn't– then emphasize how that lack is bad for their business. 

When handling price objections of this nature, you must first understand why they are considering a cheaper product/service. 

This allows you to explain why you have a fairer price based on the value you are offering. 

Consider this rebuttal: “It’s important to get the best value for your investment. While our price might be higher, it reflects our product's unique advantages, such as [mention specific features or services].

These are benefits that our competitors don’t offer, which can significantly impact your [specific business outcome]. Let me show you how these features translate into real business value for you.”

rebuttal: The “your price is too high” objection is always an opportunity to show the value of your product.

6 Price negotiation mistakes to avoid at all cost

1. Negotiating via email
2. Speaking too fast
3. Launching a monologue instead of asking clarifying questions
4. Ignoring unbiased resolutions
5. Failure to ask questions when in doubt
6. Not knowing when to leave the negotiation table

1. Negotiating via email

Effective negotiations require a personal touch to understand nuances and build rapport. This is difficult to achieve via email. It is more effective to negotiate in person or over the phone, where tone and immediate responses can be pivotal to overcoming objections. 

So, you could give the buyer a price range if they are persistent or say, 

“I've found that discussing this over a call can often lead to a better understanding and a more favorable outcome for both of us. When would be a good time for you?"

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2. Speaking too fast 

Rushing through a negotiation can be a sign of nervousness or a lack of confidence. If you pace your speech, it allows the buyers to absorb your information and respond appropriately. Pacing your speech during negotiation also shows you as being empathetic and understanding.  

3. Launching a monologue instead of asking clarifying questions

Engaging in a dialogue, rather than a monologue, ensures that prospect’s needs are addressed. Clarifying by asking the right questions helps uncover underlying concerns and pave the way for more effective solutions.

4. Ignoring unbiased resolutions

A successful negotiation often involves finding a middle ground that respects both parties' interests. Ignoring the possibility of an unbiased resolution can lead to a deadlock, whereas seeking mutual success aligns with the strategy of focusing on the buyer's perspective.

5. Failure to ask questions when in doubt

When you fail to ask questions, you leave room for uncertainties. Asking questions not only clarifies uncertainties but also demonstrates your interest in understanding and meeting the buyer's needs. For example, you could say, "I'm not entirely clear on this point. Could you elaborate a bit more so I can understand your perspective better?"

6. Not knowing when to leave the negotiation table

If you're getting ongoing buying objections or you get someone who's just sort of being lukewarm, all you need to do is hit them with it; “Sounds like this is just too early for you”, and then make them explicitly opt in to the sales cycle. If you don’t opt out, you might hurt the chances of the customer coming back to work with you.“

Learn how to improve your negotiation skills in this guide.

Overcome your toughest objections with competitive selling strategies that win big sales 

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