Handling price and product objections

By Peter Cox April 01, 2014 Money Matters

An unfortunate aspect of this industry, like most retail industries, is that while managers and staff call themselves salespeople they are more like order takers and traffic directors and nothing more.

This is more so in the handling of tradespeople objecting to the price. Too many times the easy solution is to cave in, when in fact, this may not be necessary.

By reducing the price to make the sale, you have given away Gross Profit and the ability to cover your overheads, thus profit.

The table below is very telling. If you discount you have to increase sales to cover the discount to get back to where your profits would be if you had not discounted in the first place.

For example, if a product has a Gross Profit margin of 25% and we discount by 6% you need to increase sales in volume by 31.6% in that line.




Generally the products that customers object to on price are the lower margin lines, commodity products that cannot be differentiated between stores such as cement, paint and any other cash cow product.

Customer’s objections usually fall into two major categories:

  1. Misunderstandings about your product or service due to a lack of information, or misinformation from competitors.
  2. Drawbacks of your product or service which you cannot overcome.

The first trick in handling an objection on a product you are selling is to qualify it as either a misunderstanding or a drawback

For example: A builder objects to using Product X, because a mate in the pub has told him that it doesn’t have the durability as stated in the advertising

This is an example of a misunderstanding.

You handle misunderstandings firstly by never agreeing with the client. You need to question your client on who their “mate” is, where they are located, how they applied the product and when they used it.

Since you are dealing with a client who is sceptical of the product’s performance we need proof that it works. The best proof is another builder and then the technical brochures from supply companies.

Remember, when a customer raises an objection due to a misunderstanding, they are actually providing you with useful information about their needs.

The most difficult component of making a sale is handling drawbacks.

The farmer objects to buying Product Z from your store because it can be bought cheaper down the road. You know there is no misunderstanding as you have seen the advertising that was stuffed into your own mailbox.

This is a drawback.

When you encounter an objection due to a drawback, your strategy in handling the objection is to minimise the importance of the drawback to the customer. You want to make the customer aware of benefits that you can provide that outweigh the drawback.

The first step is for you to ask yourself the question, “Why are they here?”

The first benefit you may be able to provide that the mob down the road can’t, is the actual product! Then perhaps credit facilities. Also, for those who have been in the game for a long time, expert, local, prompt advice.



Remember, not every customer shops on price. But, for those who do, you may need to remind them of the benefits which may not be available down the road.

Of course, if the client objecting to you on price is one of your best clients, a decision would need to be made as to whether the product is sold to them at the lower price.

It is too easy just to give in on price. An order taker might but a salesperson never would!


Peter Cox is a senior consultant for Macquarie Advisory Partnership based in Sydney. He has over a decade of experience training and consulting in the retail hardware industry. He conducts key-note addresses, and management and sales workshops, which are aimed at improving profitability and liquidity in one of Australasia’s most competitive retail environments. Phone 0061 438 712 200 or visit www.petermcox.com.au


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