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Objection Handling Advice

This material is copy right of Spearhead Training Group.


Introduction

Objection handling is an essential skill of any successful sales person. This material is aimed to help you overcome objections when selling to customers. Objection handling is also covered in our sales courses, which you can view by clicking on the link.

Objections are statements by the customer which express resistance to buying: criticism
of the product, the offer, the supplier; doubts about the salesperson’s arguments; denial of a
need; refusal to talk.

The topic of “dealing with objections” arises because objections from the customer are
unpleasant and dangerous. They can destroy your line of argument, shatter your self-
confidence and bring your efforts to nothing.

The customer is not (not often anyway) being objectionable but simply raising questions that
will help make a decision. Taken positively objections often indicate real interest. They might
even be a buying signal that leads to a close. In fact it is not a bad idea after you have answered
an objection to try an indirect close which might lead to a direct one.

Example:

Customer: (objection) "Your delivery takes far too long."
Salesman: (indirect close) "When would you like them?"
Customer: "In less than a week."
Salesman: (direct close) "Give me your order number now and I will see
that they are delivered in less than one
week."

The ideal way to prepare yourself for your customers’ objections is to think out the best
possible answers to the objections you regularly come across, to write them down and to learn
them by heart. This book is intended to help you with this.

If you want to succeed in refuting customer objections, you will have to pay heed to some
basic advice:

1. Avoid exaggerations.
If you talk enthusiastically about the merits of your product, you will be convincing. If you
exaggerate, you will elicit disagreement from the customer and provoke additional objections.

2. Avoid the word objection.
It sounds irrevocable, like protest or rejection. When the customer makes an objection, talk
about his idea, opinion or suggestion. Each of these terms are suitable for negotiations.

3. Show understanding
Pay attention to the customer’s ideas and suggestions. People often only express an
opinion because they want to prove their importance. They don’t actually insist that what they
say is gospel.

4. Do not let the customer lose face.
Striking proof which makes the customer’s objection look stupid or ill-considered is out of
place. It is better to help the customer refute the objection himself.

5. Pay attention to visual objections from the customer:
Watch for shaking the head, raising the eyebrows, dismissive hand gestures, deep intakes
of breath. Don’t wait for the objection to be expressed verbally, but formulate it yourself and
supply the answer at the same time: “You mean you can’t afford £1,800 for the piano? Why not
take a look at this financing plan...”

6. If you want to change the customer’s mind humorous remarks can do sterling service:
“You mean you’re not Croesus and you haven’t got a goose that lays golden eggs? I didn’t
think so either. That’s why I’ve brought you this financing plan...”

7. Don’t always take objections at face value. Sometimes the real reasons for refusal are
embarrassing for the customer and he searches for excuses. He may not even know at the time
how to react to your offer and just cites the first excuse that comes to mind.
Purchaser: “Acquiring your model PX 2000 is out of the question for us, for financial
reasons”. What the purchasing manager really means is, “Then we’ll have to retrain staff. The
workers will resist that, and the shop manager will be afraid of losing production. Let’s just leave
well enough alone...”

A salesperson who takes the objection at face value may expand on his firm’s favourable
terms of payment. In doing so, he is inevitably leading the conversation up a blind alley.

8. Clarify all objections before you reply. Test the objection by asking questions. Do you
know of any better-priced models? Do you think the machine is too expensive? What additional
problems do you anticipate? Are you bound to another supplier? Are you apprehensive of
making a changeover? Would you expect resistance to a changeover?
Ask one question after the other, regardless of how the customer replies until the customer
suddenly changes his posture, expression and tone of voice. Once you have exposed the roots
of his resistance you can introduce the counter-arguments.

First exercise

Your own list of objections

Before you get into the main body of this
material please take about 30 minutes to list
all the objections that you have heard from any
of your prospects or customers.

You will find that there are about a dozen or
so that crop up time and time again. There are
about as many again that come up from time
to time and the rest are special to your
business.

We find few salespeople can list more than
about 40 objections without actually repeating
themselves.

The generic ones we have listed in this
material. The ones that may be specific to
your product, service, or industry can be
answered by using exactly the same technique
used in this material i.e. think through your best
possible answer and write it down, as you are
encouraged to do on each of the objection
pages of this book.

Personal objection list

After you have listed your objections, work
through the material. Return to your list when
you finish the material. If there are any objections
for which you have not already thought out
replies you should have little trouble in now
finishing them.

The majority of salespeople have never
done this exercise (be honest have you?).
You will find that this exercise will give you a
real confidence boost.

Once you know you have good tried and
tested answers you get to the stage where
you positively look forward to the objection.
Now you must guard against being too quick
with your answer. Do make sure that you
hear your customer out, without interuption
before you deliver your reply.

 

Make a list as follows

Personal objection list  Best answers 

Strategies for handling objections

Objections come in two main category types. They are either true (genuine) or they are
false.

False Objections

You may wonder why people would want to give you false objections, in effect to tell lies, or
as a British Ambassador put it "to be economical with the truth." There are a number of reasons,
not all malicious. Perhaps they do not want to hurt your feelings by saying "no". They may not
wish to admit that they do not have the money or the authority to make a decision. Possibly they
want to play for time, perhaps to get competitive quotations. It could be they have already
ordered from your competitor, or are about to do so and want to check prices. You can see there
are many reasons.

The strategy for dealing with false objections

Often you know that the objection is false. Sometimes you are not sure and will wish to verify
your suspicions. If you suspect that you may have been given a false objection and want to be
sure you can check it out. This is done by means of a question. Typically it is a question of the
"suppose" variety. In fact the technique is often referred to as the "suppose test". Suppose
questions like:

"Suppose that I could satisfy your price requirement, Mr Customer, would you then place an
order?"

Or

"If I could alter the specification to include the alarm system - would that totally satisfy your
requirement?"

You can see at once what this has done. If the customer was telling the truth i.e. it was a true
objection, they will respond positively. If they were raising a false objection then they will shift
their ground. In most situations they will come up with another objection.

"It is not just the price you know - your delivery would also need to be improved."

If this happens you know the objection was a false one and your strategy is to ignore it! By
this we do not mean, no reply, although that might be valid in some circumstances. You do not
take the objections seriously, probe "Mr Customer, you are clearly not settled about this and I
would like to know what you really have on your mind, please tell me? Some further questions
to try and flush out the hidden objection are what is usually required. Once you know the truth
you are better able to deal with the situation.

Genuine Objections

Most of the objections that you will encounter are genuine objections and are answered at
face value, as covered in the text and your further work with this workbook. Your success depends upon the quality of the answers that you develop. Dedicated professional salespeople
will take time out to practice in front of a mirror or in the car between calls. The more you practise
the better your delivery will be.

The strategy for dealing with genuine objections

The strategy for dealing with genuine objections is good well prepared answers.

Genuine Disadvantage Objections

There is one other form of objection that you will have to handle, the genuine disadvantage
objection. This is when you are at a disadvantage and it cannot be denied. For example: The
customer wants delivery today and you cannot deliver until next week -and that is a fact.

Clearly you should not lie about your delivery, that will only cause other problems. You
therefore admit it. "Yes, I am sorry we do not have it in stock, however I can guarantee delivery
by Monday next week." You then go on to minimise the problem the best way that you can.
Sometimes for example you might be able to lend the customer an appliance or piece of
machinery, or part deliver the order. Anything you can do - if you have nothing else, you can do
you can at least make it seem that the wait is not too long. "After all it is Thursday today, so we
are only talking two working days."

Now you have to outweigh the genuine disadvantage with the benefits that your product or
service offers. In other words. "Yes I am sorry we cannot deliver today, however we are only
talking of a couple of working days..... In the meantime I can let you have 10% of your order to
keep you going...... It is well worth the short wait for delivery because the quality matches your
needs exactly .........etc. etc.

The strategy for dealing with genuine disadvantage objections

The strategy for dealing with genuine disadvantage objections is a three step one:

1) Admit it
2) Minimise it
3) Outweigh it

The genuine disadvantage objections are the most difficult of objections to overcome and
you will lose some business through them. If you can follow the sequence above well you will
save a lot of business. As you work through the examples that follow see if you can classify the
objection into which of these three types it is most likely to be. Many could be two types, like
number 1. "I haven't got time." Which might be sincere or could be designed to get rid of you.
There are some objections that could be any of the three groups. You will need to prepare up
to three strategies and answers to cope with these and all the likely conditions you will encounter
in front of customers.

1. “I haven’t got time”
The first objection that you will usually
encounter from a customer is directed at your
visit and not at the sale of your product. You
telephone a customer or prospect requesting
an appointment and receive the following reply,
“Sorry, but I’m so busy over the next couple of
weeks I really can’t see you”.

This answer can mean two different things:

1. The person you’re talking to really does have
a lot to do.
2. “No time” really means “no interest”.
Nevertheless, carry on with your
conversation, “If you've got no time at present,
let's postpone our discussion. My proposals
are too important to be dealt with on the
doorstep. I’ll be in the area again in three
weeks’ time. Can we meet on Wednesday 3
May, let’s say at 9 o’clock?”

You can gather from the customer’s answer
whether the objection is genuine (Case 1) or a
pretext (Case 2). If the objection is genuine,
the customer will take up your suggestion for
a meeting and may make a counter-proposal,
“I’d prefer you to ring again towards the end of
April. Then we can arrange a date soon after”.
If the customer comes up with feeble excuses,
he is probably not interested.

If the customer refuses to meet you out of
lack of interest, briefly outline the main benefits
of your offer and ask once more for an
appointment, “Mr. Holmes, could you tell me
why aren’t you interested in our RS 104 control
unit? Customers who already use it are saving
up to 12% of production costs. Doesn’t a
significant saving like that interest you as well?
Take a look at the unit at Suchard, a firm I’m
sure you are acquainted with. I can arrange an

appointment for a demonstration on May 4 or

5. Then you can see for yourself whether the
investment is worth your while. Let’s say May
4 at 11 o’clock?”
Try to state the central arguments in favour
of your offer in two or three sentences and to
link the arguments to questions. A cleverly
worked-out technique like this, tested
frequently, can change the minds of
uninterested people on the phone.

Avoid giving the customer a lecture about
the details of your product or service. The
more the customer knows about your offer,
the more ammunition he has to justify turning
down a discussion.

Another way of overcoming the “I don’t
have time” objection would be to make the
customer a little unsure, e.g. with regard to
technological developments. Explain that you
would like to tell him about long-term tendencies.
Your prospect will be tempted by information
like that.

You could also tell an unwilling customer
that you want to discuss something that cannot
be communicated by phone: e.g present expert
opinions (or testimonials), demonstrate a
model, jointly draw up a profitability calculation.
Emphasise that he (the customer) will take an
active part in the planned discussion.

2. “Come back in eight weeks’ time”
If the customer doesn’t place an order, the
salesperson is often invited to come back in
six to eight weeks. Many salespeople return at
the specified time only to find, to their horror,
that the order has already been given to the
competition.

How could that have happened? Either the
customer’s situation changed in the meantime,
making it necessary for the order to be placed
earlier or the competition initiated special
activities and forced the customer to make an
early decision.

If a large order is at stake and they postpone
the decision, keep in contact by phone. Check
every other week whether the competition is
getting active or whether the customer’s
circumstances have changed. Remind them
of your appointment. Suitable reasons to
justify your phone call include: forthcoming
price rises or product changes; new
advertising campaigns or special actions; new
additions to a product ; a changed economic
situation; the presentation of an offer better
suited to the customer’s requirements.

You can send additional written material

such as testimonials given by experts,
statistics, brochures, newspaper cuttings,
invitations or in-house journals in between the
telephone calls.

3. “I am not familiar with your company”
1. Present a list of former clients,
supplemented, perhaps, by letters of
appreciation from satisfied customers. You
can invite those who hesitate to discover the
facts for themselves.
2. Present the customer with cuttings
from newspapers and magazines articles that
portray the new firm and its products in a
positive manner.
3. Explain that those responsible for
managing the company are experienced
businessmen and engineers. Give names
and describe former careers and present
positions.
4. Propose to the customer that his
engineers rigorously test the products on offer.
5. Invite the customer to visit your firm to
see production facilities, production processes,
controls and capacities for himself. This will
also give him a chance to meet the
management.
6. Emphasise short-term introductory
benefits such as introductory prices, extended
guarantees, rights of return and service during
the course of the sales discussion.
7. Explain in a clear and concise fashion
that a supplier’s performance doesn’t always
correspond to its size or how well-known it is.
You could certainly think of some examples to
support this claim if you wanted to. The
purpose of this is to demystify idols and give
the customer independent standards by which
to judge.

8. You could explain to prospective clients
that their sales force encountered the similar
objections when starting off. Ask how they
dealt with these objections back then. The
purpose of this exercise is to force the
customer to identify with you.
9. The objection “I am not familiar with
your company”contains the unspoken, maybe
even subconscious, equation “unfamiliar =
unimportant”. Give the customer some
background such as “We were founded in ...,
Our firm is based in ..., We make ..., We
employ ... people, Our customers include ...,
We supply to the following countries...”.
10. You could also deal with this objection
by saying “You’ve never heard of us up until
now because we’ve never had any direct
contact or dealings. I often meet strangers at
the restaurant or on the train who tell me about
their firm, but it’s a name I’ve never heard of.
Then, after the conversation, I suddenly notice
the name - in magazines, on hoardings, on
delivery vans. I notice it now because I
associate it with a personal experience”.

4. “I want to think it over”
The customer did not agree to the sale, yet,
he did not disagree. He says that he needs
time to think the matter through.

1. Try and clarify his main objection. He
may not know it himself. Ask him if it is the
changeover in production that concerns him.
By doing so, you may uncover his doubts and
fears.
2. Get the customer to talk, by asking
‘why’ questions.
Customer: “I want to think it over.”

Salesperson: “Why?”

Customer: “Well, to be honest, I don’t think
that there is a market for expensive yoghurts
out here in the country.”

Salesperson: “Is that the only reason why
you won’t buy?”

Customer: “Yes, as a matter of fact! I’m
afraid of being left with surplus goods.”

3. Show the customer the profits, cost
savings and sales that he will lose out on by not
accepting your offer.
Customer: “I still haven’t decided.”

Salesperson: “Six months ago I sold your
neighbours, Taylor & Co., a two-step controller.
Today Mr. Taylor telephoned to tell me that he
had already managed to save over £1,500 in

the first six months with the help of the new
device.”

4. Suggest to the customer that they give
the product a trial run. Assure your prospect
that there will be no trouble at all for him when
the product is delivered. He can use it and test
it without obligation. You will be happy to take
it back if he so desires and are not in any way
pressurising him to keep the product.
Salesperson: “£400 is quite a large sum of
money to pay for a dictating machine. Even I
would consider such a purchase very carefully.
To enable you to acquaint yourself with the
merits of the new model, I suggest that I leave
the machine here for three days on trial. Both
you and your secretary can then test it
thoroughly. You will find it easier to reach a
decision one way or the other.”

5. You could also say something like this:
“If you still want to think things over there must
be something you’re not clear about. Please
tell me what it was I failed to clarify. Right now
I’m sitting opposite you and can give you an
answer but tomorrow you’ll have to wrestle with
the problem on your own.”

6. If you run up against a brick wall with a
customer, make preparations for your next
visit. Refer to your company’s advice service
and hand over written documents.

5. “I don’t need it”
It is said that Socrates once walked through
the shopping streets of ancient Athens and,
shaking his head, came to the conclusion.
"How many things there are that I don’t need!”

Socrates wasn’t just a frugal man, but also
a clever one: there really are an infinite number
of things which - strictly speaking - nobody
needs. Everybody has more clothes, shoes,
furnishings, books, records, odds and ends
than they really need.

If your customers only bought what they
actually needed, prospects for both you and
the economy would be bad. Fortunately, people
buy what they want, not what they need and
they desire far more than they need.

The objection “I don’t need it” is thus as a
rule both correct and irrelevant. It is correct in
the sense that it complies with the observation
above. It is irrelevant because needing is not
a real criterion for the customer because he
buys what he wants, even if he doesn’t strictly
need it. On the other hand, it does of course
occasionally happen that the customer neither
desires nor acquires things that he actually
stands in urgent need of.

So don’t take the objection “I don’t need it”
at face value. Don’t argue with the customer
over whether he needs your product. Rather,

whet his appetite by tempting him with your
product. Talk as you had originally intended,
about the conveniences of owning it, its
prestige value, its beauty, etc.

Later, when you have awakened the
customer’s desire for your product, it may still
be necessary for you to prove to him that he
needs it. This is so that he can justify his
desire rationally to himself. This is something
we all do from time to time.

6. “Your competitors need to earn a living too”
“Mr. Taylor”, says Matthew Horner,
purchasing manager of a metal goods factory,
“I know very well that you want to sell 300,000
Jiffy bags, however, your rivals also need to
earn a living. You can take an order for
100,000 dispatch bags at a unit price of 5
pence. Don’t be disappointed, you don’t get an
order like that every day!”

Objections like that put many salespeople
off balance. One person will say to himself,
“Well, I suppose that it’s better than nothing”,
and book the order. Another will accept the
proposal because they believe it sounds fair.

Nonetheless, Henry Tailor, a well-trained
stationery representative, doesn’t give up. “Mr.
Horner, I take my hat off to your sense of
fairness. But to be totally honest it sounds to
me as if your objection conceals a slight doubt
about my offer? Please let me summarise the
advantages of my offer once again:

1. If you take 300,000 padded bags, you’ll
be paying 4 pence per piece. This includes the
printing of your company name. With an
order of this size - as opposed to three orders
of 100,000 pieces each - you’ll save about
£1,000.
2. If you order 300,000 padded bags, my
company will undertake free storage for you.
You call for delivery of what you need. Delivery
takes place within 48 hours and you only pay
for the amount you collect each time.

3. One order means one act of ordering,
one invoice, one inspection of incoming goods,
one inventory control. You save yourself a lot
of administrative work that way!”
The stationery representative Henry Taylor
comes back to the issue of fairness:

“Mr. Horner, no doubt you want the best
quality, the most favourable price and
guaranteed delivery. My offer fulfils all three of
your requirements. If you place the complete
order with me for economic reasons, you won’t
be acting unfairly towards my colleagues in
competition. When it comes to another offer
I might hold the weaker hand, and then
somebody else will win.”

7. “Your delivery service is inadequate”
The quality of a firm’s delivery service is
gaining importance when buying decisions
are being made by bulk purchasers in industry
and commerce. For the salesperson that
means making skilful use of a company’s
service policy during negotiation. Eliminate
the competition which may be offering at a
more favourable price by emphasising the
variety of your services!

1. Delivery periods. Inform your
customer what your firm’s delivery periods
(that period of time from when an order is
placed to the receipt of goods by the customer)
are and what those of your competitors are
like! Explain the connection between volume
of orders and delivery period.
2. Readiness to deliver. What is the
certainty (80%, 90%, 100%?) that the products
required by the customer are in stock and can
be delivered immediately? A company’s
readiness to deliver plays a decisive role in
spare-part deals, for example. Make a selling
point out of your firm’s degree of readiness to
deliver.
3. Reliability of delivery. Reliability of
delivery is often more important than the
delivery period. The customer is not so
interested in an excessively short delivery
time, but he does want to be sure that the
agreements reached (appointed date of
delivery, correct destination, completeness of
the delivery) will be adhered to. Inform your
customers of planned delivery days and tours
that are available, and how the distribution
systems (e.g. delivery ex-works) are
safeguarded. Tactfully mention the unreliability
of many competitors in this respect.

4. Nature of the delivery. Indicate the
shape, measurements, weight and marking
of the product and its packaging. How is the
product protected against the dangers of
damage, loss, etc.? What about ease of
inspection, price marking, storage?
5. Terms of delivery. In this case we
are concerned with questions like times for
taking delivery, loading equipment, packing
and transport units, etc. If it isn’t one of your
duties to agree terms of delivery with major
customers, then you should encourage your
company to carry out bulk deliveries within one
to six hours of the agreed delivery time. This
also has advantages for the forwarding
department, since vehicles that deliver on
time will be given priority and cleared first.

8. “We don’t want to increase the number of our
suppliers”

1st answer

You congratulate the customer on his
excellent supplier relations, but draw his
attention to the disadvantages of working with
only one supplier.

“My congratulations! Not every purchasing
chief has been so lucky in finding a good
supplier. And not every purchasing chief is so
loyal towards their supplier! However, don’t
you also think that there are advantages in
having a second supplier? After all, competition
promotes business! You will only be insured
against operational hold-ups if you have a
second supplier to fall back on. Even the most
reliable supplier can fail now and then.
Consequently, there’s a considerable risk to
your production...”

2nd answer

No customer is ever 100% satisfied with
his supplier. You hint at details and then lead
on to your offer.

"How do things stand with regard to delivery

periods, the annual quantity discount, long-
term purchase commitments? Do you never
have cause to complain? Please take a look
at my firm's programme and the services
which we provide..."

3rd answer

You initiate a long-term customer-
acquisition programme which 9 times out of
10 will lead to success.

“My firm has been in this business for
decades and we want to stay in the business
for a long time to come. You don’t just need a
supplier today; you’ll also need one tomorrow,
next season and next year. That’s why I’d like
to invite you to have a look round our factory
and our modern dispatch facilities. Mr.
Seymour our Manager, who knows I’m visiting
you, would be happy to greet you in person if
you came to visit the factory...”

9. “One supplier is sufficient”
If you’re preparing the ground for business
with a new customer who rests firmly in the
hands of a competitor, you have to proceed in
a considered and careful way. Suppliers, as a
rule, have close and multifarious contacts with
their customers and personal matters often
play a part.

The following rules of conduct and
arguments may be useful when dealing with
customers who are duty bound to the
competition:

1. Don’t blurt out everything. Instead of
offering your full range of products select a
special item or a special service. Choose a
product where you have more to offer than the
competition, as regards price, performance or
contribution. Suggest a trial delivery.
2. Point out the greater security of supply
if the customer has two suppliers to rely on. If
production is interrupted, due to an industrial
dispute or a fire, at one of the supplier firms,
the second one can help out.
Motto: “Better safe than sorry”

3. Someone who buys from two suppliers
will have two suppliers’ stores at their disposal
and will consequently save on storage costs.
A second supplier is a step towards “zero
stock”, the dream of every buyer nowadays.

4. Today’s markets are characterised by
a constant flood of new materials, new
equipment and new designs. Tell the customer
that it is worthwhile having a second supplier
simply for reasons of purchasing department
market research.
Motto: “If one wants to keep up with
technology, one needs to exchange ideas
with several manufacturers”.

Indicate what areas your Research and
Development Department are currently
working on.

5. A customer whose requirements
rapidly expand or contract will be in a more
flexible position with two sources of supply.
Two suppliers can meet the needs of the
customer more easily if that customer
experiences an unexpected boom in business.
On the other hand, a customer who depends
exclusively on a sole supplier can get into
serious difficulties if sales suddenly collapse.

10. “We’re reducing the number of our
suppliers”
Many department stores, wholesalers and
industrial firms are reducing the number of
their suppliers. They put forward the
arguments that with fewer suppliers the
administration of purchasing can be simplified,
terms and conditions can be improved and
storage costs can be lowered. They advance
the additional claim that one will enjoy
favourable prime costs, strengthening the firm’s
competitiveness, and that they will save a lot of
time owing to fewer visits from representatives.

What can you do if a customer turns down
a new business connection or threatens to
break off an old one with the objection that
"We’re reducing the number of our suppliers"?

1. Choose an attractive article that is good
value from your range of products. Using this
as ‘bait’, point out to the customer the
opportunities he will be missing if he turns
down the offer.
2. Point out the risk: “Don’t rely on a single
supplier in uncertain times. A myriad of firms
go bankrupt in Great Britain each year. There
could be an important supplier of yours among
them one day. It’s always safer to hedge one’s
bets”.
Example: One season, a textile department
store placed their orders for blouses with a
single manufacturer. The producer went
bankrupt shortly before the agreed date of
delivery. The department store was unable to
find an appropriate substitute in such a short
period of time. This resulted in a substantial
loss of turnover.

3. Tell the customer that a reduction in
the number of suppliers will inevitably lead to
the loss of market flexibility. Explain to
prospective clients in the retail trade that a
greater number of suppliers means a greater
choice for the customer and consequently
better sales prospects.
4. Give a customer who will neither take
the bait nor back out the chance to act as a
“marketing adviser”.
Example: A furniture manufacturer was in
danger of losing the custom of a furnishing
house. In response, they decided to include
that customer in their circle of preferred buyers.
New products are presented to these
customers in advance every year so that they
can have an influence on the design. Not only
was the furnishing house retained as a
customer, but it increased its purchases
substantially.

5. If a buyer declares that they definitely
will not enlarge their number of suppliers, then
don’t believe him. No business enterprise will
dispense with new sources of supply. A
survey of wholesale enterprises has shown
that 75% of all businesses list new suppliers
every year.

11. “I don’t want to become dependent on a single
supplier”

A long-standing customer is completely
satisfied with you but he’s only giving you a
portion of the orders you could carry out. He
claims that he does not want to become
dependent on a single supplier.

What can you do?

Ask the customer why he wishes to have
more than one supplier. Then you’ll find out
that there are three things he is afraid of.
Firstly, he fears that one day you’ll no longer be
able to deliver swiftly and adequately.
Secondly, he fears that he will lose track of
what’s happening in the market and fail to keep
up with progress. And thirdly, he fears that he’ll
be neglected as a routine customer.

How do you mollify the customer?

Delivery difficulties: Invite the customer
to visit your firm. Show him the installations,
the production facilities and transport facilities.
Remind him of the punctual deliveries in past
years. Prove the reliability of your own
suppliers. Propose guarantees governing the
ordering and delivery of goods (after
consultation with the sales management).

Technological progress: Show the
customer the research and development
department(s) of your company. Point out
development work in merged businesses.

Remind the customer of the continual
improvements in your products over the past
few years. Name other respected customers
who stake everything on you.

Negligence: Point out that this is not a
danger as closer co-operation will make you
just as much dependent on the customer as
the customer is on you. Promise even better
customer care.

Calculate for the customer the increases in
purchase price which he will have to put up
with if he divides the order among several
suppliers. Demonstrate that he will save
considerable transport costs if he places a
single order.

Say to the customer, “That is a charitable
attitude. Surely you don’t want to give money
away. If you split your order up among four
suppliers and pay the full price each time
instead of taking a lorry load with a quantity
discount, you are giving 7% away. With your
requirements that means a monthly loss of
exactly £328.63.”

12. “I’m satisfied with my present supplier”
Ask the customer in what respect they are
particularly satisfied with their supplier?

This question brings to light the standard by
which the customer judges his supplier, i.e.
which criteria are most important for him.

Should the customer reply, “We can, for
example, get any quantity we like delivered at
any time we want at no extra charge”, then you
know that that he/she lays particular stress on
flexibility and punctuality in delivery. He attaches
less importance to all the other advantages.

Since you presumably can’t surpass the
existing supplier in the delivery sector, you will
have to change the customer’s criterion of
judgement. You will have to make the customer
consider the specific advantages of your offer
to be equally important.

You can for instance say, “Our Xoran is
non-toxic. You only need to soak it once and
you can cut down on your safety precautions”.

If this argument fails to arouse the
customer’s interest try another course of action,

“Are you familiar with our graduated bulk price
scale?”

Sooner or later you’ll find a particular need
which the customer’s present supplier fails to
satisfy. At this point you should introduce your
suggestion, “Why not test it for a couple of
weeks...”

13. “We buy from one of our customers”
Look at the customer in a friendly way and
ask, “Are you sure that your supplier/customers
are offering you the same terms, advantages
and service as they do to their other customers
whose orders they have to fight for month by
month?”

Wait for the customer’s reply and then ask,
“Are you sure that your supplier/customers
rack their brains to find the best technological
and organisational solution for you, as they do
when they have to knock out half a dozen
competitors”.

Whatever answer the customer gives,
continue, “Are you sure you can’t market the
products you sell your supplier/customers
more profitably elsewhere, where you can bid
the full value of your trump cards without
worrying about counter-claims?”

State, smiling, “I’m not your customer, Mr.
X. I must offer you the best possible
performance on the best possible terms if I
want to do business with you. You ought to
listen to my suggestions. It could be useful to
you to be able to make a comparison.”

14. “We have a local supplier”
Customers sometimes justify their choice
of supplier with the fact that the supplier is
located in the vicinity: “We have been buying
from Jones & James for years. They are right
here in the town.”

Ask, “What advantage can Jones & James
offer you that I can’t?”

There are two answers to this question:

1. The advantages are listed: better prices,
lower freight charges, faster delivery, prompt
customer service and after-sales service,
replacement goods delivered immediately, etc.
Prove to the prospect that you can offer the
same advantages (prices, customer service,
speed of delivery). Offset the natural
advantages of the local supplier (immediate
replacement of goods, for example) with other
performances (better quality, longer guarantee,
stronger consumer advertising, etc).
2. In some cases no concrete advantages
will be listed in response to your question.
There are personal connections and feelings
of local loyalty involved: “It makes sense not to
travel several hundred kilometres when you’ve
got a source right on your doorstep”. Try to
discuss concrete advantages at this point of
the negotiations. Ask, “Do you just take your
car to the nearest workshop, or where they’ll
maintain it properly and at the most reasonable
price?”

Point out to the customer that having a local
supplier also has its problems: “Sometimes
it’s not such a good thing to allow neighbours to
peer too much into your business. Rumours
start quickly and tongues wag”. You don’t
need to clarify the statement any more than
that. Nobody likes their neighbour poking their
noses into private business.

15. “I buy from a business colleague”
If a customer refuses an order on the
grounds that he buys from a business
colleague, there are two questions that can be
used as door-openers:

1. “Which of your business friend’s services
do you value the most?”
The purpose of this question is to bring up
the topic of service as experience teaches that
this is a frequent snag with “buddy deals”.
Suppliers often neglect the service aspect
with customers with whom they are friendly
and whom they therefore think they can be
sure of. You can only win the customer over
if you make him aware of the defects in the
existing relationship and give him hope that
you will eliminate them.

The question invites the customer to say
good things about his business friend. You
will see whether he does. If the customer
hesitates or tries to avoid the subject, then you
know you have asked the right question, i.e.
your competitor’s service is unsatisfactory.
You can keep chipping away until you uncover
the details of the faults and thus get the

opportunity to offer your own services. A
question like “Are you satisfied with your
business friend’s service?” would be wrong.
That would tempt the customer (against his
better judgement) to say "yes" out of loyalty to
his friend.

2. “What would I have to do to get an order
from you?”
This question also causes the customer to
think indirectly about faults in his current
business relationship. In what way does the
present supplier fail to come up to
expectations? Could a new supplier do better?

The customer may express a wish that can
be fulfilled. Then you have almost won. He
may also express a wish that can’t be fulfilled.
The question in any case opens up discussion
about the reality of the existing business
relationship. Listen carefully. Pay attention to
undertones. Look for the unlocked gate through
which you can slip into the “protected area”.

16. “We’re in good hands”
How do you act towards a potential buyer
who has been firmly in the hands of the
competition for years?

If you simply list the advantages of the
product you are offering, you won’t make any
impression. After all, the customer is
completely satisfied with his present supplier.

If you immediately try to demonstrate the
weaknesses of the competition, you’ll arouse
the customer’s resistance. He will not like the
implicit reproach that he has been buying
uncritically.

The best thing is for you to say, “I know
you’ve been buying from XY for years and I
realise that you are a satisfied customer.
That’s your right, as XY is a reliable firm with
good products and prices. However, I would
not have come here, knowing all that, if I didn’t
have something very special for you...”

Why is this such a clever lead-in? Firstly,
because it doesn’t force the customer to
vindicate his long-standing business
relationship by giving new candidates the cold
shoulder, and secondly, because it makes the
customer very inquisitive. The customer will
then reason that a salesperson who knows all
about these highly unfavourable starting
conditions and comes all the same really must
have something special up his sleeve.

Explain expressly that you don’t want to
eliminate the current supplier. You’re just
advising the customer to secure a second
source of supply.

Arguments you can use:

1. “House and home” suppliers often
become an expensive source of supply in the
course of time. They charge higher prices
without it being noticed. A second supplier
allows the customer to compare prices.
2. Products are subject to change in terms
of fashion, materials, design and taste.
Whoever takes advice about product
developments and market tendencies from
two different sides will be better informed.
3. Whoever relies on a sole supplier is
always taking a risk. There might be
disturbances in supply; there might be a fire;
the supplier company might be hit by a strike
or suffer a financial crisis. Situations of this
kind are less dangerous if the customer has
two legs to stand on.
4. Raw material bottlenecks can appear
overnight as the oil crisis proved years ago. It
is better to have two sources of supply in times
of shortage.
5. Whoever divides his orders between
two suppliers will keep both of them on their
toes. He will create competition which will
work to his own advantage.

Naturally there numerous price related objections as follows. The subject of price handling is also extensively covered on our sales courses. You can view these courses by clicking in the link.

17. “That’s too much money at the moment”
This objection expresses the customer’s
regret that he cannot afford to buy your
thoroughly desirable product at present. There
are three responses to such an objection:

1. Your product will help the customer to
either make money or save on costs. Calculate
for the customer what sales or profits he will
achieve, what costs he will save and when the
investment will have paid for itself. Discover
the “profit aspect” of your products.
Building contractor: “That’s too much
money at the moment.”

Construction machinery rep: “Mr.
Johnson, it’s a good thing you’ve mentioned
this problem. If you start to use our sturdy
4,000-kg-payload forklift in your depots and
on difficult terrain today, you’ll be saving
money in the long run. The calculation is as
follows...”

2. Work out for the customer how much
your product costs per day, per working hour,
per 100 kilometres travelled or per employee.
Split the price up into sections and apportion
each section to some unit familiar to the
customer. Make the purchase money look
smaller. Distribute the amount of invoice or
the premium over 12 months, 52 weeks or
365 days.
Painter and decorator: “I can’t afford that
at the moment.”

Insurance representative: “Mr. Smith, if
you take out a life assurance policy for £35,000
the annual premium will come to £916. Don’t
be shocked! This premium means no more
than setting aside a mere £2.50 a day in order
to make provisions for your family of four and
to secure your personal standard of living in
years to come.”

3. Tell the customer about the different
ways your firm can facilitate terms of payment:
financing, payment by instalments, extension
of a loan, delivery by instalments, cash
discount, part exchange, etc. It is vital to
express yourself in absolutely unambiguous
terms so the customer won’t be misled by
false expectations. You must also stay within
the bounds of the possibilities given to you.
Purchasing manager: “Our budget is
exhausted at present.”

Industrial representative: “I happen to
know of a customer who will take on your
manual carpet-sweeper. I can pay you £85 for
it if you place an order for a vacuum cleaner
now. You’ll save 7% if you order today.”

18. “You’re too expensive”
Every customer knows that the lowest price
is not always the best price. Even so, every
salesperson is occasionally bothered by
competitors offering lower priced products.
So how do you defend yourself against this
problem?

1st method. Turn the tables: Explain to
the customer that the reason you are expensive
is because you are excellent. Take the example
of a home-owner who believes that "your
lawnmowers cost a small fortune”. The
representative of a horticultural firm could reply
in the following fashion: “You’re right. Our
electric lawnmowers are anything but cheap.
Even so, we sell 60,000 of them a year. I
hardly think that we would have been so
successful for so long if the product was not
worth its price?”

2nd method. Break the offered price
down into individual parts. The customer
now has to be exact about what he says. If a
purchasing manager says “I can get a drill like
that for less”. The machinery representative
replies, “There are differences between offers
of this kind, and I don’t just mean differences
in price. You know about the superb technical
conception of our ultrasonic drill. You’ll get
favourable terms of payment, the trial run will
take place under our supervision and your
staff will be trained at our workshop. In what
respect does the competition have more to
offer?”

3rd method. Tell the customer that
goods in the higher price range sell just as
well and that this means a higher profit margin
for the retailer. The food retailer says, “£6.50
for one bottle? You can’t be serious!” The
wine representative replies, “If you are thinking
about those of your customers who buy wine
for £2.99 then you are quite right, my offer is

expensive. For the customer who normally
pays £7.00 it is the most reasonable offer.
Display my late vintages in your window and
you’ll see that this price range is in great
demand.”

4th method. Raise doubts in the other
person’s mind as to whether the cheap offer
really is advantageous.

Buyer: “The Italians can put up a filter unit
for me for £25,000 and you’re asking for
£40,000!”

Sales engineer: “Mr. Wise, doesn’t such
a low price make you suspicious?”

5th method. Point out a particular
advantage that you can offer. In the following
example the cheap competitor’s service man
had to travel from a distance of 80 km away.

Salespeople: “If I was installing a gas heating
system, I wouldn’t rely on the cheapest one.
Gas heating needs to be serviced from time to
time, and you certainly won’t want to pay high
travelling expenses for that. Besides, a fault
can sometimes occur, a leak for example,
and then you need an expert on the spot
quickly.”

6th method. Appeal to the customer to put
his trust in you personally.

Home-owner: “Mr. Baker, you are 50%
more expensive on average!”

Removal salesperson: “Mr. Oakes,
efficiency in removals isn’t an automatic
mechanism, it’s the work of human hands. So,
efficiency in removals consists first and
foremost of trust in the removal firm’s people.”

19. “£26,000 for a car? You can count me out!”
Frank Serking sells Mercedes cars. For
customers who are switching to Daimler-Benz
from another make, the question of price is of
greater importance than, say, for Mercedes
drivers buying new models. Serking has spent
a lot of thought on how best to defeat price
objections and has tried out a lot of “tricks”.
The following method often brings him success:

Shortly after the start of conversation, as
soon as a suitable opportunity arises, Serking
declares just in passing, “It’s enjoyable to talk
about Mercedes with someone who knows
how to choose the best for himself”. This
makes the chests of many customers swell
with pride. With this remark the salesman
demonstrates respect for his customer’s
prosperity, judgement and taste.

When in the further course of discussion
Serking comes to mention the question of
price, the prospect’s resistance to that price
often turns out to be mild. Serking says, “The
customer still recalls how I expressed
admiration for his taste and his discrimination
at the start of the conversation. Many people
are afraid of spoiling that good impression with
petty wrangling over the price. The trick is not
perfect but it works more often than you’d
think”.

This method, suitably modified, can also be

applied in other trades. An office machine
salesperson may say, “You can afford to buy
the top dictating machine”. A food salesperson
may declare to a delicatessen owner, “You’ve
got an excellent, financially strong clientele.
Our new jars of caviare are just the right thing
for them”.

Put the method to the test. Appeal early on
in the discussion to the customer’s wealth,
income, standing, discrimination, taste or
reputation. This may help you to overcome
price resistance more easily in a large number
of instances.

20. “I don’t agree with your selling price”
Your sales discussion frequently enters its
critical phase when you quote the price. The
customer takes fright, having hoped for lower
figures. You have to soften the “blow” and
soothe the “wound”. How do you do that?

1. Quote the price without fear, without
aggression (intended to cover up fear) and
without triumph (intended to make the
customer believe that the price is fantastically
low). Place the requested figure in the middle
of a sentence which points out a particular
merit of the offer. Something like this: “The
whole machine, with the special casing
illustrated here, costs £830. What you can’t
see is the free quarterly maintenance service
included in the price”.
2. After the customer’s first reaction, direct
the discussion so you can once more remind
the customer of the merits that justify the
price: increased efficiency, safe operation,
generous guarantee provisions, etc. Stress
advantages that are not available for the rival
product.
3. If the customer criticises the price level,
talk about costs having risen all round. Ask
him whether his own firm has put up prices
recently or is about to do so. If he answers yes,
then you have won the round. If he answers
no, then ask him what his secret method is for
avoiding price rises. The information he gives
will make it easier for you to demonstrate the
differences between his industry and yours.
4. Minimise the price by distributing it among
small units, “That means an extra outlay of 5
pence per working hour” or “the additional
grinding raises the cost per item by 0.2 pence”.

21. “I can’t agree to your terms of 2% discount
in 10 days or 30 days net price”
A customer declares, “I can’t agree to your
terms of 2% in 10 days, 30 days net. I expect
at least 3% cash discount within 10 days.”

Many salespeople give in to such demands
too quickly. The difference between 2% and
3% cash discount doesn’t seem great, but in
actual fact it’s enormous. Just as interest
rates always relate to the whole year, so cash
discounts too must be converted and
represented as an annual figure. The formula
is:

Annual Interest =
Cash discount X 360 days
Payment period net - Cash discount
days
Example 1: Terms of 10 days with 2%
cash discount or 30 days net. For payment
within 10 days 2% is therefore allowed. Which
means to get the money in 20 days earlier
costs:

Annual Interest = 2 X 360 = 720 = 36%
30 - 10 20

Example 2: Terms of 10 days with 3%
cash discount or 30 days net. For 20 days 3%
is therefore allowed.

Annual Interest = 3 X 360 = 1,080 = 54%
30 - 10 20

The difference is quite considerable.
Someone who allows 3% cash discount within
10 days will be paying an interest rate of 54%,
believe it or not. When you consider that you
can borrow money from the bank for about
10%, it becomes clear that the customer is
doing wonderfully out of the deal, and that
representatives who increase cash discount
rates rashly are lumbering their firm with an
interest burden which will grow out of all
proportion.

If a salesperson has to make concessions,
it is as a rule better to offer goods or services
than to grant cash reductions.

Example: When a forklift truck is being
sold, a 2% reduction from £30,000 is £600 in
hard cash. An accessory with a sales value of
£600 that the customer needs in any case is
likewise worth a full £600 to the buyer. However,
at a margin of, say, 40% it will only cost the firm
£360.

22. “My budget doesn’t allow it”
Establish what the “budget” looks like. Find
out:

1. Is it a fixed amount earmarked for an
investment?
2. Is it an estimate of what a certain
investment might cost?
3. Is it an upper limit which must not be
exceeded for a certain investment?
4. Is it meant for a whole area of investment,
so that the allocation of funds to the different
purchases is open to disposal, or is it meant
for specific single items?
5. Who drew up the budget? The buyer as
a negotiating aid for himself? The management
board? A study group as a recommendation?
The competition by means of an offer?
When you have lifted the fog surrounding
the term budget, it usually turns out that it is
possible to talk about budgets. The customer
looks at the relationship between benefit and
cost. He will be unhappy if someone fails to
offer him an appreciably better solution simply
because it exceeds his budget.

A machinery salesman draws a circle,
divides it into eight segments and writes a

merit down in each one. He says,

“Mr. Smith, you get eight advantages. First
of all let me mention our 24-hour service. On
top of that, we, the suppliers, are also the
inventors and consultation is carried out by
engineers. The other advantages include
absolute impact strength, resistance to rot,
exact screwdriver guidance as well as a
protective casing and low electricity
consumption”.

Engineers' consultation
Impact strength
Rot resistantProtective casing
Inventor 24 hour service
Low electricity consumption
Exact screwdriver guidance
The customer gets an impression of the
wealth of benefits, and these, represented
visually, stay firmly embedded in his mind.
The salesperson seems more convincing
because he says at the start that there are
“eight significant advantages for you!”.

23. “5% extra and I’ll order”
A special discount is in most cases not
requested until the end of the sales discussion,

i.e. when the customer has made the decision
to buy.
1. Explain your pricing system. Your
prices are, perhaps, net prices. They are
calculated in such a way that a discount usually
granted in the trade has already been
deducted. This guarantees equal treatment
for all customers and prospects.
2. Lead the customer away from the
discount issue. Ask the customer whether
he would place the order if he did obtain the
desired discount. Then continue by asking
whether you can set this problem aside for a
moment.
3. Summarise, once more, the
advantages that the customer will gain on
purchasing your product. Write these
advantages down on a piece of paper one after
the other so they can be read by the customer
without any difficulty.
4. Diminish the benefit of the requested
discount. First clarify in how many years the
customer would like to see the investment pay
for itself. Then divide the discount amount by
the number of years. Divide the result in its
turn by 220 working days (the average number
in a production year). The discount amount
per day thus calculated will be minute.
5. Get the discount into proportion.
Calculate the benefits and savings that the
customer will achieve per day through the
application of your product. Find out how
much the customer would pay, per day, to
obtain this advantage. This amount will greatly
exceed the daily discount.

Price concessions often have further-
reaching business effects than is generally
assumed. It is important to bring this to the
customer’s attention!

Example: An article sells for £100 and
normally 10 pieces are sold. That results in a
gross turnover of £1000. The costs amount
to £60 and the gross profit £40 per piece; the
gross profit on 10 pieces is therefore £400. If
the price per piece is reduced to £85, the new
gross profit will come to £25 per piece. If we
divide the original total gross profit of £400 by
£25, it turns out that 16 pieces will have to be
sold to maintain a gross profit of £400. 16
pieces at £85 each mean a turnover of £1360.
A rise of 60% in terms of quantity and 36% in
terms of value is therefore necessary.

24. “I insist on a quantity discount”
Every salesperson has to wrestle with
customers’ demands for exceptional prices,
special discounts or extra bonuses. The
representative of a steel cabinet factory could
present the following argument:

“Mr Brown, I freely admit that I’m very
interested in the order you have in mind for 50
multi-purpose storage cabinets, unit price £66.
With an order of this size you’re entitled to a
quantity discount of 5%. But you’re insisting on
a further 5%, and that demand will get me into
terrible trouble!”

“I’m not kidding. My firm wouldn’t quite
make a loss at a unit price of £66 minus 10%,
but the extra 5% would hit us quite badly! In
both my company and yours the prices have
been calculated and the profits budgeted. The
competition sees to it that profits don’t go sky-
high. It’s no different for you either. The whole
company policy including investment and
product development is based on profit
planning. If profits are not met, then the
planning goes up the spout.”

“I give you my word that I’ve concluded all
my deals in the last 18 months on the basis of
the bulk price scale. That means that my
hands are tied not only by my firm’s pricing,
but also by fairness towards all my other
customers. Assuming, Mr Brown, that you
had paid the fixed bulk price and we allowed
another customer 5% extra - how would you
judge my behaviour then?”

The steel cabinet salesman fares very well
with this line of argument, which contains

nothing but the truth. Serious customers find
it very hard to maintain their demand for a
special discount after such an appeal to their
common sense - especially if the competition
has nothing better or cheaper to offer.

A new selling aid has been devised by a
representative who sells an organisation unit
worth £350 and who repeatedly has to face
customers’ demands for discounts.

He photocopies cheques for £350 which
well-known firms have written in payment for
the device. The representative then holds
these photocopies under the nose of every
prospect who insists on a reduction.

Savings bank manager: “I’d like a
discount”.

Salesperson: “If I open a savings account
with you I’ll receive 5% interest. If I go to your
competitor next door I’ll get 5% there too.
Interest is interest. Price is price. Look at this:
ten crossed cheques from industrial firms,
banks and trading institutions. I’m sure that
you are familiar with the names! All of them
paid £350 for the device. It would be unfair to
my other 300 customers if I made even a
single exception. I’m sure you can understand
my predicament. After all, don’t you encounter
similar problems?”

25. “I can’t accept your price increase”
“Owing to increased costs we are
unfortunately compelled to raise our selling
prices by 6.5% as from April 1 of this year...”

Very few buyers nowadays will be satisfied
with a general justification for a price increase,
such as the one given above. They will ask to
examine the costing documents and will want
to know all about the development of cost
types. How has expenditure on personnel,
materials, energy and freight developed? What
share of the selling price do the most important
cost types amount to, and what is the effect of
their increase? These are questions which
interest purchasing managers; questions
which they would like to have answered.

The table shows what a cost estimate,
used by a salesperson to get a price increase
accepted, can look like.

Salesperson’s Price Demand (example)

1. Costs Key for Product XYZ Component Total
price price
increase increase
1.1 Wages share 50% 7.0% 3.5%
1.2 Materials share 35%
Share Price change
Steel 35% +8.0% = +2.8%
Cast iron 30% +7.5% = +2.1%
Light metal 20% -2.0% = -0.4%
Synthetics 10% +5.0% = +0.5%
Misc. 05% +5.0% = +0.3%
35% 5.3% 1.9%
1.3 Overheads 15%
(incl. energy)

Fixed
Countable overheads 15% 6.0% 0.9%

 [count towards price]
Total price increase demanded 6.3%

If you decide to work with tables like this,
you will have to bear the following in mind.

1. The cost shares and rates of increase
have to be watertight. Don’t present a naive
estimate because an astute buyer will spot it at
once.
2. Explain the rise in the different costs in
detail to your partner in the deal. Be prepared
for specific questions and objections, such
as, “Why have overhead expenses gone up
by 6% when the oil prices included in that have
fallen by 9%?”, or “Why has staff expenditure
gone up by 7%? The last pay agreement in
your industry only provided for a 4.2% increase”.
If you start to stutter now your admirable
argumentation aid will be worthless.
3. Keep a diagram such as this in a safe
place - the purchasing manager will do the
same. When you present a new plan six or
twelve months later, he will get out the old one
and start making comparisons.

26. “The competition is cheaper”
Ask the client if the competition really offer
the same quality and breadth of application.
Do they really offer better prices, quantity
discounts and cash discounts?’

If the customer says yes to these questions,
continue, “As you know, we have a big market
share. I think that proves our prices are
reasonable. If someone is offering the same
product at a lower price there must be a
difference somewhere. Nine times out of ten,
reduced prices means reduced performance”.

Now ask a series of questions leave quite a
long pause after each one so the customer
has time to think:

“Is the other supplier’s customer service as
extensive as ours?”

“Perhaps the scope of their guarantees is
narrower?”

“Have you ever compared the servicing
and maintenance costs?”

“Does the other supplier also submit to the
official safety tests?”

“Stress capacity is very important. Can the
other product stand up to your production
conditions?”

“Are you assured maximum performance?”

These questions often give the customer

food for thought, and it becomes apparent that
there are areas where the products differ.

If the competing offer really is the same as
yours, there are two possible reasons for the
price difference:

1. The competitor is operating with loss
leader prices just in order to get business
going. Newcomers to the trade are the main
exponents of this tactic. Stay on the ball! After
two or three or six months the competitor will
have to stop supplying goods cheaply if they
don’t want to go bankrupt. Then you will have
a real chance once more.
2. Your firm really is expensive. Maybe
business is going so well that the management
thinks the boom can be exploited by raising
prices. If you get the impression your firm is
taking advantage of the good order situation to
make extra profits, but you are afraid of losing
a good customer, discuss the situation with
the sales or company management. A
responsible corporate management which
does not just have all eyes fixed on the next
three to six month's business will be open to
discussion.

27. “The margin on that is too low”
What can a salesperson say if a retailer or
wholesaler objects by saying that the margin
is too low?

1. “You say the competition offers more.
Certainly they do, but only for a short time.
We grant special terms too when we launch a
new product or push through a bargain sale.”
2. “What good is a 5% higher profit margin
to you if you only sell the product three times
per annum? Our products will cross your
counter five times a year. You’ll make a lot
more with us than with the competition.”
3. “Our product is a key brand. You carry
it because you want to be a well-stocked store
and your customers come to you because
you have a good assortment. With the help of
our product you won’t just earn our discount
but also discount on all sorts of other articles.”
4. “You can’t just count percentage points.
Your profit margin is only a part of what we’re
offering you. We also offer you our advertising
and support for your campaigns, the reliable
quality of our products, our 0800 Telephone
Service, the remote data transmission facility,
our customer bonding programme...”
Another way of refuting objections based
on profit margins is to contrast approximate
figures with the specific customer data and
make this comparison the heart of your
argument.

One european beer salesperson, for example,
relies on the following statistics in his sales
talk.

The European Retail Grocery Trade

Turnover Gross profit A r e a
Productivity
Cheap beer 26 £250 £5,487
Consumer beer 30 £357 £7,505
Premium beer 33 £406 £11,445
Foreign beer 17 £270 £4,105
Special beer 20 £270 £4,725

Malt beer 28 £438 £3,931
Average EC
Selection 14.3 times

(18.7 for £160 £3,085
chain stores)
Results: 1. Beer hardly ties up capital.

2. Beer attains disproportionately high gross profit.
3. Beer achieves above-average area productivity.
The diagram contains index numbers on
sales of beer in the West German retail grocery
trade. The salesperson can prove to a retailer
who up to now has sold only cheap beer but no
premium beer that he is denying himself a
profitable segment. Premium beer turns over
33 times a year on average and attains an area
productivity of £11,445. The comparable
figures for cheap beers are 26 times and
£5,487 respectively. No buyer can close his
eyes to facts like that!

You could adapt this table to suit your
company’s figures. Statistics backing up a
claim which you make will cement your
argument more firmly and could be the element
which will turn a prospect into a customer.

28. “My selection is broad enough already”
The following is a list of counter-arguments
which are recommended in this particular
instance.

1. “The consumer is demanding new
products more than ever before. They prefer
shops where they’ll always find something
new. In the eyes of the consumer new items
are a mark of a progressive businessman.”
2. “If consumers can buy a new article
somewhere, then they usually demand it from
their own shopkeeper too. If this person
doesn’t stock the product, then the customer
will just go to another shop that will satisfy their
requirement!”
3. “The test sale we carried out recently
attracted a good demand. Stores the size of
yours achieved a weekly turnover of £...... in
the first month alone.”
4. “This product corresponds to the latest
ideas in environmental protection (engineering,
public health, etc.)...”
5. “This product will round off your main
assortment. You know that the wider the
assortment offered, the higher your sales will
be.”
6. “Do you stock products whose sales
figures you’re not happy about? Of course
you do! Use your article statistics to check
which slow-selling products you can give up in
future in favour of new products.”
7. “My firm is carrying out a big initial
advertising campaign for this product,
embracing adverts in the press, TV
commercials, outdoor advertising and prize
competitions...”
The benefit that your product can render on
the market can be proved most clearly by
means of reference numbers. More and more
trading customers expect you to argue with
the help of reference numbers, such as markup,
benefit per item, inventory level, capital tie-
up, turnover rate, area productivity, area
profitability, gross benefit per metre squared,
contribution, etc. The way different index
numbers turn out is shown by the following
table containing the reference numbers of two
comparable products:

Product A Product B

1. Selling price incl. VAT 1.42 -1.30
+
2. VAT of 17.5% 0.21 0.19
3. Selling price excl. VAT 1.21 -1.11 +
4. Purchase price without VAT 1.06 -0.85
+
5. Margin (gross) % 17.8 -28.6
+
6. Benefit per item 0.15 -0.26 +
7. Market share % 30 + 15
8. Number of pieces sold
given same area and time 20,000 + 10,000
9. Turnover rate 2 + 1
10. Gross yield 0.30 0.26
given same allocation of times + times
area
11. Area productivity 25,800 + 11,900
12. Area profitability 3,000 + 2,600
(contribution/m2)
With reference numbers of this kind you
can quickly refute the customer’s objection
that their selection is broad enough.

29. “The market is saturated”
If the customer puts forward a factual
objection, it is worthwhile turning it into a
question.

Does your customer know exactly what
advantages, what utility or what services your
offer holds? You can only find this out by
asking questions.

If a dealer you call on declares that the
market is saturated you should ask the following
questions:

“For what product?”

“What leads you to that conclusion?”

“Saturated by whom?”

“In what respect?”

“Why?”

“But surely not for all products?”

When the customer gives his reply, it will
probably turn out that he has taken back his
objection concerning market saturation. Now
you can follow up with a targeted offer, for no
demand is covered 100%. There is always a
demand gap, be it ever so small.

Forecasting data is another suitable
argument aid you can use to refute “saturated
market objections”. The sales representative
for a supplier of computer accessories bases
his sales presentation for floppy disks on
extrapolated forecasts reaching up to the year
2000, based on the last decade.

2,370,000
1,680,000
1,020,000
710,000
1990198819861985
Development in number
of personal computers with
floppy disk drives (Federal
Republic of Germany)

30. “You don’t advertise enough”
What can the salesperson do if the
customer justifies his negative attitude towards
the offer by claiming that the firm does not
advertise the product sufficiently and that the
product is therefore largely unknown to
consumers?

1. Cite the size of the advertising budget.
2. Show and explain the advertising
schedule.
3. Present recent advertising material
such as newspaper and magazine
adverts, leaflets or advertising
letters.

4. Give the times that radio and
television adverts are broadcast.
5. Present a complete list of dealer aids
(aids supplied by the manufacturer
to retailer).

6. Explain contests and competitions.
7. Cite participation in trade fairs and
exhibitions.
8. Mention direct advertising camp
aigns and outdoor advertising
measures.

9. Offer advertising allowances and
subsidies.
10. Explain joint advertising campaigns.
Your firm’s newspaper and magazine
adverts in particular can serve you well in
discussions with customers. Here are a few
pieces of advice on how to use these adverts
effectively:

1.Start up a file in which you keep specimens
of the adverts that have appeared over the last
six months. Take the file with you when visiting
the customer.
2. Check through your stock of adverts
when preparing your visit and select those that
are suitable for supporting the lines of
argument you will take with the individual
customers.
3. Show your customer advertisements in
particularly well-respected media before the
adverts appear. In this way you refute his
objection.

31. “My warehouse is practically overflowing”
When a customer comes up with this
objection there are two things you need to
clarify: a) Is his claim true? b) Is he fully
stocked-up with your products or chiefly with
those of the competition?

1. Ask, “How much have you still got?” Get
the customer to name individual items. Check
the date and quantity of the last delivery. Try
and verify the information the customer gives.
“Are you not mistaken there? Could we just
briefly check the quantities? If you are right,
we’ll have to help you with sales in some way.”
The prospect of assistance will motivate the
customer to give you the insight you desire.

2. If the customer is stocked up with
competitors’ goods you will have to prove your
own products have a higher turnover rate, “I
see you’ve got a lot of money invested in
supplies that won’t be so easy to turn into
cash. You need products that will sell quickly
and make money available. Here are the
sales figures of other suppliers (present the
table)...”
3. If the customer is stocked up with your
products, then you have to check why that
should be, “Who are you offering the goods
to? With what arguments?” (Probably with
none at all!) “Since when have sales been
declining? What do you think is the reason for
that?” Your customer makes mistakes. You
have to detect these and correct them. You
will probably have to help using suggestions,
arguments, advertising material, etc. Suggest
second placements and action sales.

4. Even if the customer is still well-supplied
with goods, you can aim to get an order - either
on the basis of particularly favourable terms
which apply at the moment or by means of a
later delivery date, “Take advantage of the
currently favourable terms and place an order.
In eight weeks’ time things will be back to
normal! Raw materials prices may carry on
rising. Shortages can’t be ruled out either...”

32. “There is no demand for your product”
There are two possible ways of countering
the claim that there is no demand for a particular
product.

1st method

Tell the story of the customer who likewise
declared ‘Not interested’ at first, but
subsequently purchased because he realised
he could do good business with the article.

Owner of a man's shop: “I gave
leisurewear a try once in the past. There was
no demand. I’m not interested.”

Salesperson: “Have you ever been served
food you didn’t like in a good restaurant? Of
course! But did that make you give up going
to restaurants now and then? Of course not!
See, it’s the same in business! There’s more
and more interest in leisure fashions now than
there used to be even from more mature age
groups. Taylor & Co, a name you are familiar
with, added our leisure clothing to their
assortment three months ago. Just ask Mr
Taylor what his sales are like!”

2nd method

Appeal to the customer’s sense of prestige,
to his standing as a businessman.

Delicatessen owner: “There’s no demand
for your item. I’m not interested.”

Dairy representative: “Have you ever
considered why you go to the post office when
you want to buy stamps? Silly question, isn’t
it? Even so! You go to the post office because
you’re absolutely certain that you’ll get stamps
there! It’s no different for the consumer!
Consumers prefer stores where they can find
everything that’s new on the market. Such as
Britain’s first curd dish with whole fruit...”

33. “Your product doesn’t turn over fast
enough”

How can the salesperson reply when a
customer complains about the turnover rate of
a product?

1.“Please don’t look at the individual articles,
look at the whole assortment. In order to
satisfy all customer wishes we need to offer a
big range of goods. The assortment, as a
whole, turns over very quickly.”

2. “Let’s just check the placement of the
goods. Where’s the product located? Near
what other products? How wide is the stack
and at what level is the product positioned? Is
the placement area sufficient? Where would a
second placement be?” (The salesperson
usually discovers errors in placement during a
conversation like this. If these are corrected,
the turnover rate will often rise.)
3. “Have you carried out all the
recommended sales promotion measures?
Have the large price notices been hung up, the
show cards positioned and the shelf stoppers
secured?” (Inadequate sales promotion, which
damages the turnover rate, offers the
salesperson a starting point for effective
counter-arguments.)
The salesperson can also counter
objections to the turnover rate of an article by
making proposals for a special action. Attention
must be paid to the following criteria when
special actions are being undertaken: 1.Period
of offer (first delivery - final delivery). 2. Terms
and conditions of offer. 3. Quantity of offer. 4.
Product. 5. Article number/product code. 6.
Contents of box, size, design, packaging. 7.
Net purchase price.

In the consumer goods field it is customary
to demonstrate the potential gross proceeds
to the customer by suggesting a possible
selling price besides the net purchase price.
The following table shows the written offer
proposal of a consumer goods salesperson
for a special action.

34. “We’re selling off all our stock”
Every customer, whether retailer,
wholesaler or industrial purchaser, is at present
endeavouring to sell off all stock. This leads
to smaller orders and shorter order-placing
periods. How can you resist this development,
which makes sales fall and costs rise?

1. Look closely at the stocks that your
customers want to reduce. Study your
company’s computer printouts to discover
what volume of products the customer sold
during the last quarter or half-year? What did
he order in the same period? A comparison of
goods sold with goods purchased will furnish
you with arguments.
2.Be an objective “inventory adviser”. Agree
to reduced ordering if the customer’s turnover
or consumption is clearly in decline. Insist on
a higher level of stocks if the sale or
consumption of the product rises.
3. Point out the additional costs that arise if
five or ten small orders are placed instead of
one large one. Calculate what advantages the
customer will stand to lose (more favourable
discounts, lower purchase prices, lower
transport costs) if he alters the rhythm of
procurement. Mention the small-volume mark-
ups which will have to be charged for small
orders.

4. Bring it to the attention of buyers that a
small stock of raw materials, semi-finished
goods or spare parts can quickly lead to holdups
in production. Remind wholesalers and
retailers that gaps in their stock, caused by a
changed ordering rhythm, will result in lost
sales and annoyance among customers.
5. Point out additional possible uses for
your products to customers who want to run
down their stock of your manufactures. Give
customers in the retail trade advice on sales
promotion.
6. Make suggestions to retailers and
wholesalers for joint sales promotion actions,
such as house fairs or information events for
customers. Help to arrange customer
seminars at which group sales are effected.

35. “We lack the experience for such new
technology”

New products elicit particular objections
because they are unknown to the customer.
These objections are caused by a justified
distrust of all things new because:

It is impossible to get an exact idea of the
product’s performance and thus to know
whether acquisition is necessary.

The follow-up costs cannot be estimated
precisely.

The customer has, as yet, no experience of
new suppliers.

It is not known when this capital good will be
overtaken by new technological developments.

How great will the difficulties of adjusting to
the given technological and organisational
conditions be?

Will the employees accept the innovation?
How long will the changeover take?

Expect “innovation” objections if you are
offering something new. Use specific
arguments even if the objections are not openly
expressed; don’t just rely on words. Back up
your arguments with documentary material
such as drawings, diagrams, detailed
photographs, slides, films, references,
calculations, test results, expert opinions, etc.

Throughout your line of argument lay special
emphasis on the following offers made to the
customer by your firm (if they exist):

- the provision of unambiguous operating
instructions;

- the development of work-flow systems; 
- the preparation of profitability calculations
and profitability comparisons;

- consultation by engineers and technicians; 
- longer test phases and trial installations;
- lease-purchase and leasing, with later

replacement by improved successor equipment;
- the inspection of plant already installed with
key customers;

- attendance at specialist lectures, workshops,
seminars and symposia;
- training courses for the operating personnel.

36. “Your competitor’s product is better”
How do you react if a customer confronts
you with this objection?

1. Check which rival product the customer
is comparing your product/s with. Are they
comparable? Do they correspond in their
areas of utility and performance? Are they in
the same price range?
2. Find out where the customer has obtained
his knowledge of the rival product. From
hearsay? From his own experience? From
advertising campaigns? The source of his
information may be unreliable.
3. Get the customer to explain which
features and aspects of performance of the
competing product he believes to be superior.
If you know which features he considers the
most important; you will have established what
are his strongest buying motives.
4.Prove that your product provides precisely
those advantages in a different form, under
different conditions. Give the customer
convincing samples, documents and
references.
5. Draw the customer’s attention to
advantages that can only be found in your
product. Explain why your product is not
comparable in the final analysis.
6. Draw the customer’s attention to the
disadvantages of the rival product: costs,
difficulties of fitting in to existing plant, narrow
range of application, susceptibility, etc.
7. Give the customer the addresses of
dissatisfied owners of the rival product. He
should listen to their opinions. By doing that
you avoid the necessity of making a frontal
assault on the rival product.
8. Give the customer the chance to try out
the product. Arrange a demonstration at his
premises or at your firm, at the next trade fair,
at another customer’s place or by means of a
trial delivery.

37. “The unit has technical faults”
The salesman for a machinery factory
counters the objections of his new prospective
customers with the following method:

As soon as the customer starts to criticise
the products, the advantages promised, the
arrangements for installation and set-up, the
service performances, the terms and other
elements of the offer, the salesperson assumes
a serious, attentive expression. He leans
back in his chair and calmly places his hands
on the table-top or on his lap. He listens
intently and without speaking, nodding to the
customer as a sign that he understands what
is being said.

When the customer has finished, the
salesperson asks about details of the objection,
“You would like the clutch housing to be
positioned lower. Where do you think it should
go?”

When the meaning of the customer’s
spoken objections has been clarified through
questioning, the salesperson says, “What other
faults can you see? What fears do you have?
What problems do you expect? Which terms
are you unhappy about?”

The salesperson gives a convincing
assurance that his great success in selling is

primarily due to this objection tactic. He says,

“The composure with which I listen to their
objections and the self-assurance with which
I invite them to make further criticisms, give
customers the impression that my offer cannot
be faulted. They lose confidence in their
objections as soon as they’ve uttered them,
and they listen to my replies with great
receptiveness.”

38. “The works management have turned your
equipment down.”

“We’ve tested your work lighting. Our
production manager, Mr. Cook, told me
yesterday that the luminous intensity of your
device is no greater than that of Mouse & Co.’s
light installations, which we use at the moment.
However, your product costs 10% more. So
I’m afraid that we will not be placing an order
with you.”

How do you deal with an objection like that?

1. In the short term.
It makes no sense to talk to the buyer about
technical details. You are better off saying, “I’d
be very happy to demonstrate the special
qualities of my product to Mr. Cook again. My
device possesses clear-cut advantages which
help to raise the quality of work. If it’s alright by
you, I’ll just briefly pop over and see Mr. Cook.”

If the buyer makes a disapproving face, you
can add, “Or could you ask Mr. Cook to come
over to your office for five minutes? Then all
three of us could discuss the matter together.”

2. In the long term.
Cultivate your connection with the

production engineer and all the engineers at
the works. Keep these people informed about
all technical improvements. Send them
informative material (prospectuses, expert
opinions, test reports, technical journals,
articles, etc.). Ask the works manager’s
assistants, the foremen and assistant
foremen, for their opinion too. If possible, offer
a new product for trial use.

39. “The machine is still in working order”
Although the customer may be perfectly
satisfied with his present machinery he could
be losing out by holding on to it. Assure your
prospective client that he has nothing to lose
and everything to gain by investing in new
equipment and machinery.

By keeping his old machine the customer
loses out on all the advantages made possible
by technological improvements, such as
shorter production times, lower labour costs,
higher levels of safety, faster retooling and
more efficient use of materials.

Inform the customer that his competitors
have replaced their old machines and are
producing more economically.

Point out that the longer he retains the old
machines, the more costly the acquisition of
new ones will become. Rising materials and
labour costs and rising expenditure on repairs
and breakdowns will diminish profits.

The older the present equipment is, the

less it will yield if traded in. The customer
would be well advised to exchange his
machinery while he can still get something for
the old equipment.

40. “The material is no good”
Customers like to take cover behind
sweeping statements when they turn
something down (all A people are unreliable; B
products break down after two years; C material
warps). Generalisers are bad listeners and
like to interrupt you. They are hard to negotiate
with and difficult to convince.

Sweeping judgements have two root causes

-an intellectual one and a psychological
one:
1. The intellectual root is a lack of
knowledge and experience. The customer
has had some bad experiences with one or
two people, products or material specimens
from a particular category. Now he makes the
mistake of generalising the particular conditions
that pertained on those occasions and drawing
the false conclusion that the outcome is always
negative.
2. The psychological root consists of
conceit and laziness. Conceit tempts the
customer to give judgement and feign
competence. Laziness prevents him from
deferring judgement until he has learnt the
necessary facts.
If sweeping negative judgements are
standing in the way of you concluding a deal,
then they will have to be demolished. How do
you set about that?

1. Put right the customer’s lack of
information - pull out the intellectual root.
Present him with easily understood, graphic
evidence (this type of customer doesn’t have
much patience!) which undermine his opinion:

“Please compare these two materials
specimens” or"Please examine these official
statistics”. Documents, specimens, samples
and pictures are more convincing than verbal
contradiction!

2. If the customer stubbornly insists on his
opinion you will have to talk to him about the
specific experience which forms the basis of
his sweeping judgement. “Have you ever
bought B products?” “Where did you use C
material?” “Have you seen the deformed
material yourself?” Don’t let up until he can
feel how shaky the foundation of his judgement
is.
3. Give the customer a chance to save
face; “I thought the same myself until I received
this information here.” or “I understand your
reservation. It’s perfectly logical unless you
take into consideration the facts that only
emerged two weeks ago...”

41. ‘We have to cut back’
“Demand is slack and the decline in sales
coupled with our high costs are causing us no
end of trouble. We have to cut back.” How can
you counter economic pessimism like this?

1. Point out that economic cycles follow
each other more rapidly now than in the past.
Boom succeeds slump more quickly than it
used to. Argue along the lines “If you only buy
today what you need tomorrow, you won’t be
able to satisfy your customers the day after
tomorrow when economic activity picks up
because the goods won’t be there.”
2. If pessimism is widespread you can
assume that the economic horizon will brighten
before too long. There is a wise old saying
which is valid both for stock exchange
predictions and for business forecasts: a
majority that embraces 80% or more of the
opinion-formers in a group is always wrong!
3. The pessimists point to high
unemployment statistics, declining incoming
orders and falling output figures. What they
don’t see are the positive developments such
as the reduced inflation rate and the declining
interest rates on short and long-term capital.
In the last few years the long-term interest rate
in Germany has retreated from 12% to 6%,
whilst the U.K rate has been up to nearly 15%
and down to 10% with further cuts forecast.

The motto for discussions with pessimists:
‘When the night is darkest, the dawn can’t
be far away.’

42. “I’ve still got to talk to Mr. X”
This objection may mean that your
discussion partner does not possess authority
to purchase. Sound out the situation “Are
orders officially placed by Mr. X?” If that is the
case, then you are talking to the wrong person.
On your next visit head for the responsible
man.

1. If it turns out that your interlocutor does
have a right to take part in decisions, then try
to obtain a provisional order “subject to the
agreement of Mr. X”. Tell the customer you
can save further discussion if you can work
out the order straight away. If you do obtain a
provisional order, then you will usually have it
in the bag. It rarely happens that the man in the
background calls your discussion partner back
into line. Often he doesn’t even exist. The
customer just doesn’t want to admit that he
still needs time to think it over.
2. If the customer should refuse to place a
provisional order, try to get yourself included in
the discussion with Mr. X. “What do you think
of a talk between the three of us? If Mr. X wants
additional information, I can give it to him at
once and you won’t lose any time checking
back with me”.
3. If the customer turns you down again,
ask when your discussion with Mr. X will take
place. Unless Mr. X is ill or on holiday, a date
within a week’s time will usually be given “I’ll
see him tomorrow morning” or “I’ll meet him in
the next few days”.

This information is a great deal of use
because you remain informed about the further
course your offer is taking. You can still “fire
off” follow-up information up to the date of
discussion. You may in the process have a
bright idea for a demonstration which will
secure you access to the meeting after all.
Above all you know when you can ask again
how things stand and the customer knows
when he will have to justify himself to you
again. You should always stay on the ball!

Well done! You have completed the text and if you have worked using this
material to record your thoughts and ideas you will have gained a number of ideas
that will help you to greater personal success in handling objections.
Knowledge has to be turned into skills and that is done by practice in real
selling situations. Good luck.

If you would still like to develop your objection handling skills and your sales skills, please view our range sales courses by clicking on the link.  

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