Overcoming Objections: Price
We think of money as a measurement of success, value, and even good taste. We describe it with metaphors like “money is power.” But when it comes to sales, money is just money and your clients won't be shy about telling you they don’t have enough. What do you do?

Overcoming objections to price is one of the first things anyone in sales has to learn. It’s hard to argue with phrases like, “It’s too expensive” or “I can’t afford it.” But what you can do is show the client you’re listening and reframe the situation to make sure there isn’t something else underlying the objection.

The Price Isn’t Right

What does a client really mean when they say they can’t afford it? Here are a few possibilities:

  • They got a lower quote from someone else. They probably don’t know that some quoters only ask for a minimum of information and, as a result, provide an inaccurate quote. If they’ve provided further detail for you, they may not know this changes their rate. Hearing you quote a higher price may make them feel taken advantage of.
  • They got a quote for a less expensive product, but are now pursuing more expensive alternatives (ROP, IUL, etc.). In this case, they aren’t comparing apples to apples. They probably don’t understand the differences between policy types and features. If they’re willing to move forward, show them a side-by-side comparison for the cheaper and more expensive products from several carriers so they see how pricing depends on the product, not the agent.
  • They were thinking in terms of small monthly payments but the yearly payment amount looks and feels too high. It’s the same amount, but there’s a psychological distinction between a $100 monthly payment and $1,200. That bigger number may be scaring them. It may also indicate they’re facing big financial battles like unemployment, medical bills, or an unexpected expense. This is something you can ask about in follow-up questions.
  • They don’t know that you can’t negotiate the life insurance offer. You know a ton about life insurance, but your client doesn’t. They may be thinking it’s like buying a car, with a little wiggle room. They probably don’t understand how underwriting works and how, as the agent, you’re presenting their information to the carrier, but you’re not setting the price they pay.

Digging Deeper

But how do you find out which possibility is the right one? You have to ask.

If you’re dreading that conversation, keep in mind that your prospect probably is, too. They may not have the skill or the vocabulary to tell you why they feel the price is too high. Sometimes, the answer will be as simple as “I can’t afford more than $50 per month, period.”

But more often, it may be an expectation the client had before working with you. It may involve past policies, previous quotes, or other agents. You need to know this so you can give them the right information going forward.

Step 1: Take the Pressure Off

First, it’s a good ideal to acknowledge the fact that you’re not trying to sell them anymore. This shows you’re listening and you’re respecting their wishes. However, you can still ask for more information and let them circle back if you have more information and ideas that can help.

For example, you could start with: “Out of your price range? Okay, that’s not the right option for you, then. We can just set that aside.”

This helps them relax—you’re not going to push the issue and sell them something they just told you they couldn’t afford.

Step 2: Be a Good Listener

Now, it’s time to ask for and explain why you need a bit more information. “Can you tell me more about what you’re looking for in terms of price and coverage?”

If they stop or don’t answer, you can elaborate to help them. Remember, they may not know what they were looking for – just that the price quoted is too high for their monthly budget. You might say, “When I heard this from other clients, it was because they already had a lower quote for a different product, they wanted to negotiate the price down, or they’d been looking at the monthly amount, not the yearly amount. Once I know where you’re coming from, I’ll know if that’s something I can help with, or if it’s not something we can fix. Either way, this will help both of us get on the same page.”

Even if you can’t help them, you’ve left a good impression and tried to give them more context and information. You proved that you were listening to them and giving them a chance to tell you more about their needs, budget, and situation.

A New Way to Think about Price

Does it seem like most of your sales that fall through do so because of price? That may not actually be the case. According to Charles Green of Trusted Advisor Associates, agents in his training sessions say their lost sales are based on price 25-60% of the time.

That’s a lot, right? It seems to confirm the fact that consumers really are shopping based on price.

But then Green asks these advisors about their last sale—was it also based on price? Now the situation flips. The percentage here ranges from 0-10%.

What gives? How are consumers eliminating purchases based on price, but not making them based on the same criteria? The most logical answer is that they aren’t. It’s likely that consumers aren’t actually making buying decisions based on price. Price may just be the easiest way for them to get out of a sales situation. When they do decide to buy, they’re taking more than price into consideration. That’s why it’s important to ask the tough questions about their needs and budget.

Your time, effort, and understanding may be what tip the scales when that consumer does decide to buy.

That’s our look at overcoming objections to price!

How do you deal with the price objection? Tell us in the comments!