Latest / Sales Leadership with Fexingo: Quota Carriers, Sales Managers, and Revenue Teams / How Sales Teams Can Stop Losing Deals on Price
Transcript
- Lucas: Your price is too high. If you've been in sales for more than a week, you've heard that sentence. And most reps hear it and immediately start thinking about discounting. Luna: Right. The default move is to drop the price by ten, fifteen percent and hope the deal closes. Lucas: Exactly. But here's what's interesting — a lot of the time, that objection isn't really about the number. It's a signal that the buyer doesn't see enough value relative to the cost. And if you respond by cutting price, you're actually reinforcing the idea that your product was overpriced in the first place. Luna: So you're saying the price objection is often a value articulation problem, not a budget problem. Lucas: That's exactly it. And there's a great case study from a mid-market SaaS company I've been following. They were a CRM platform competing against Salesforce and HubSpot, and their win rate was okay, but they were discounting on almost every deal — sometimes as much as thirty percent. So their sales leader decided to run an experiment. Luna: What did they change? Lucas: They retrained the entire sales team on a value-first framework. The rule was: before you ever mention price, you have to quantify the ROI the customer will get. Not in vague terms — you have to build a business case together with the buyer. Show them exactly how much time or money they'll save, or how much revenue they'll gain, over a specific period. Luna: And that changed the conversation? Lucas: Dramatically. Within six months, their average discount dropped from around twenty-five percent to under ten percent. And their win rate actually went up slightly. Because when a buyer has co-created a business case showing they'll get a three-times return on investment, the price suddenly looks reasonable. Luna: That makes sense. But I'm wondering — what about commoditized markets where the product really is similar to competitors? Can value-first still work, or do you end up having to compete on price anyway? Lucas: That's the million-dollar question. And I think the answer is that even in commoditized markets, there's almost always a differentiation you can lean into — it might be your service, your implementation speed, your integrations. But the more important thing is psychological. Luna: What do you mean? Lucas: Anchoring. If you're the first to state a price — especially if it's a premium price — you set the anchor. Everything after that is compared to that number. So if you lead with a lower price, you're anchoring low. But if you confidently state a higher price and then justify it with value, the buyer's brain starts working to justify paying that much. Luna: So you're saying sometimes you should actually raise your initial price to signal premium positioning? Lucas: Yes. And I've seen this work. One enterprise software company I know raised their list price by twenty percent and trained reps to not discount at all for the first two months. Their close rate dipped initially, but the deals they did close were at higher margins, and after a quarter, their overall revenue actually increased because they were leaving less money on the table. Luna: But how do you train reps to hold the line? Most salespeople are conditioned to give concessions to close the deal. Lucas: That's the hardest part. It requires a shift in mindset from 'I need to close this deal' to 'I need to help this buyer make a good decision.' And that means giving reps a playbook for handling the objection without caving. For example, when a buyer says 'your price is too high,' the rep should ask: 'Compared to what?' Luna: That's a great question. Forces the buyer to be specific. Lucas: Exactly. Sometimes they compare to a competitor that offers less functionality. Sometimes they compare to doing nothing. And then you can have a real conversation about value versus alternatives. Another tactic is to reframe the conversation from cost to investment. You say: 'I hear you on the price. Let's go back to the business case we built. If this investment generates a four-times return, is the price still the issue?' Luna: And if they still say yes? Lucas: Then you might have a genuine budget constraint, and you can talk about scope — maybe a smaller implementation, or a phased rollout. But you never just drop the price without getting something in return, like a longer term commitment or a reference. Luna: So it's about trading concessions, not giving them away. Lucas: Right. And the key is to make sure the rep feels empowered to walk away. If you're desperate to close, the buyer senses it and pushes harder. But if you're willing to walk, you have leverage. Luna: That's a really helpful framework. And honestly, this kind of conversation is exactly why I love doing this show. We get to dig into the real tactics that actually move the needle. Lucas: Yeah, same here. And you know, if you're finding these conversations useful — whether you're a sales leader or a rep trying to sharpen your skills — there's a simple way to keep the show going ad-free. If you want to support us, you can buy us a coffee at buymeacoffee.com/fexingo. Luna: It genuinely helps us keep doing deep dives like this one. No pressure, but we appreciate anyone who chips in. Lucas: Alright, back to the price objection playbook. One more tactic I want to mention is the 'pocket price' concept. A lot of companies have a list price, but after discounts, rebates, and concessions, the actual revenue per deal is much lower. And that's a silent margin killer. Luna: So you're saying the price you quote and the price you actually get are often very different. Lucas: Exactly. And if you track your pocket price — the true net revenue after all discounts — you might find that your average deal is actually unprofitable. So one of the most powerful things a sales leader can do is analyze their discounting patterns and set hard guidelines. For example, any discount over ten percent requires VP approval. Luna: That creates friction, which forces reps to justify the discount. Lucas: Right. And it also signals to the organization that price integrity matters. Over time, that becomes part of your culture. Luna: I think there's also a coaching angle here. A lot of reps don't know how to handle the objection because they've never been taught. So a sales manager needs to role-play these scenarios in one-on-ones. Lucas: Absolutely. And it's not just about the words — it's about confidence. If the rep sounds uncertain when they say the price, the buyer picks up on that. So part of the training is about delivery: stating the price with conviction, then pausing, and letting the buyer respond. Luna: That pause is crucial. Most reps rush to fill the silence with a discount. Lucas: Yes. And the research backs this up. Studies on negotiation show that the person who speaks first after a pause tends to concede more. So if you can stay quiet for just a few seconds after stating the price, the buyer often answers their own objection. Luna: That's a simple but powerful technique. So, to sum up: don't assume price objections are real budget constraints, quantify value before quoting price, anchor high, trade concessions instead of giving them, and coach reps on delivery. Lucas: That's a solid summary. And I'd add one more thing: track your discounting data. If you don't measure it, you can't improve it. Most sales leaders have no idea how much margin they're leaving on the table. Luna: So what's the one thing you'd want a listener to take away from this episode? Lucas: That the price objection is often a gift. It's an invitation to have a deeper conversation about value. If you treat it as a negotiation to lower the price, you lose. But if you treat it as a chance to reinforce the value, you build a stronger deal and a stronger relationship. Luna: Great way to put it. Thanks, Lucas. Lucas: Thanks, Luna. See you next time.