Cheap Buyers? How To Deal With Low Budget Customers In 6 Steps

How To Deal With Low Budget Customers, Selling in Asia Podcast, Tom Abbott

What do you do when your customer says they only have a budget of $2,000 (or so they say) – and your product sells for $2,500? You know they’ve just hit you with the dreaded price objection, so what do you do? Do you drop the price to $500 to match their budget and give them a discount? Most people would, right? Wrong. That’s the wrong answer for several reasons. In this episode of the Selling in Asia Podcast, Managing Director Tom Abbott discusses how to deal low budget customers in 6 steps. Read on to discover the difference between cheap and frugal customers and the different price negotiation tactics they often like to attempt. 

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The difference between cheap and frugal customers

Today, most customers are looking to save money on purchases, or at least get the very best deal they can get – because most prospects know that they already pay too much for their current solution provider and need to reduce their expenditure. However, when dealing with low budget customers, salespeople must be aware of; Frugal and Cheap. Let’s explore their differences below: 

Cheap CustomersFrugal Customers
Often afraid to spend money. Often focus on assessing the bigger picture.
Only care about spending less.Prioritise their spending so that they can have more of the things they want/need or really care about
Driven by saving money regardless of the cost and will likely sacrifice quality, value and time to acquire short-term savingsDriven by maximising the total value of the purchase
Uses price as the bottom line. Uses value as the bottom line.

How do buyers negotiate price objections?

Like in all sales areas, salespeople must be prepared for every customer interaction – and in this case, some buyers will try specific tactics to get you to lower your price. That’s why below are some common price negotiation tactics you should be aware of when dealing with cheap customers who might use them to gain a positional advantage:


Anchoring is the price negotiation tactic of sharing a target price or budget cap to anchor the bargaining range down in their favour. For example, prospective buyers may say something to the effect of, “we’re only really looking to spend no more than $250,000 for this.”

In this case, the best way to approach the customer is to take the lead from the get-go and suggest a price. However, if you can’t do that, instead ask the customer how they calculated this figure and how it fits into their budget – the idea is that you want to uncover whether they’re stating a real number or a lie.

This type of price negotiation tactic is why it’s essential to prepare for any price objections with possible alternatives you can offer by determining your BATNA, WATNA and walk away point.


A typical price negotiation tactic commonly employed by cheap customers is to always push back on the first price offered. In this instance, salespeople must ask why the price is too much, listen carefully as the buyer explains their objection, and ask permission to understand the issue thoroughly. For example, they may say, “I bought a similiar product for atleast half that price before!” and you respond by pivoting your answer to resolve or at least challenge the objection like, “I think the reason you’re still looking for a solution is that because you purchased a product from [competitor] that differs from our product because [x, y, z reasons]”


In this price negotiation tactic, buyer’s attempt to dismantle bundles to gain concessions and assume that the price will stay the same. However, you don’t have to accept changed terms because the buyer changed them. Instead, address the issue head-on by stating that you’ll need to review the pricing dependent on the proposed terms. This response will make it seem like that their new terms have effectively come out of nowhere and that it’s unlikely to happen, but you will engage in a discussion about appropriate pricing.

Prepare a valuable offer your customer can’t refuse

Before you step foot in the room or pick up the phone to negotiate the terms of a deal, you need to be fully prepared with your offer, alternatives and knowledge of when it’s time to walk away. When you effectively prepare to negotiate, you maximise your chances to not only win the deal but to secure terms that work in your favour.

Prepare an offer your customer can’t refuse by downloading your free negotiation planner.

  • Identify your BATNA
  • Calculate your reservation price
  • Identify buyer’s alternatives
  • Determine your bargaining range
  • Determine your alternatives to discounts
Negotiation Planner, how to prepare to win the deal free resource

How to deal with Low Budget Customers

1. Find out why that’s their budget

Does your prospect have the money? Can they afford it? Do they have the budget? To handle the price objection, you need to find out if they can’t afford it (affordability) or if they don’t see the value. If the answer is yes, they can afford it -then you need to start looking at how to demonstrate value and make sure that they see that this is the right solution for them. So you address price objections that revolve around value by demonstrating the value, not by dropping the price.

If, on the other hand, they see the value, they think your product is worth it, but they just can’t afford it, you need to address the price objection by finding a way to make it easier for them to afford it. For example, can they pay monthly instalments or pay a deposit now and the rest later? To find out why that’s their budget, the next time you’re speaking with a customer and they say “Oh, that’s expensive.” Ask them:

“When you say it’s expensive, or you say it’s too much, do you mean that it was more than you planned on spending?” (Affordability) “Or, do you not see the value of that price or you’re not sure why it’s priced at that much?”

The answer to that question will be very different and will then help to steer you in the right direction as to how you handle that price objection.

2. Assess their needs

Creating a needs assessment of your prospective customers’ needs can help you more accurately understand their most pressing challenges while at the same time positioning you as someone who can provide solutions moving forward.

2. Assess their needs, 10 needs analysis sales questions to ask

You could start by looking at your offering, approach, philosophy, process, etc. Then re-phrase these statements in the form of scale statements. For example, “I have created an assessment to accurately understand my prospective customers’ needs and position me as someone who can provide solutions. Rate yourself on a scale of 1 to 10 (1 is ‘Completely disagree’ and 10 is ‘Completely agree’)”.

3. Focus on demonstrating value

 If you drop the price to match their budget, all you’ve done is you’ve actually said, “You know what, my product really isn’t worth $2,500, to begin with. It’s only worth $2,000,” so maybe that comes across as unethical, to begin with. Why would you charge me X and now drop it down to Y? 

Instead, demonstrate the value. Why is your product or service worth $2,500? Help your customer understand how this can help them solve a problem.

If you exhaust everything, hard qualifying, value demonstration if they still don’t “get it”, stop fighting. Stop pushing and move on to find another customer who gets it! Who loves what you’re doing and are willing to invest because they see the return on investment. If you do all the hard work of ‘qualifying’ opportunities early on, it makes it a whole lot easier down the road when you’re negotiating. There shouldn’t be too much back and forth negotiation once you’re towards the end of the sales cycle.

4. Define Their Options

It’s important to start all negotiations by planning out in advance what you’re able to sensibly offer in terms of freebies, discounts, and concessions. This is all called defining your bottom line and your walk-away point. Don’t let pressure and uncertainty control the path of your sales negotiation because ultimately, it will only lead to you losing even if you ‘won.’

By knowing your absolute limits, you’ll ensure you aren’t manipulated into conceding to your prospects Price Objections or a deal you can’t happily deliver on. Any offer that’s less than your bottom line should be dismissed, and alternatives pursued instead.

5. Confirm you’ve satisfied their objection

Now, check that you’ve satisfied their objection with your solution. Trust me, just because the customer nodded along to your responses doesn’t mean they entirely agreed; instead, they’re polite. So, ask if they’re happy to continue with your solution and explain other components if necessary. 

6. Know when to walk away

If after you go through everything, hard qualifying, value demonstration, if they still don’t “get it”, stop fighting. Stop pushing. And move on. Find another customer who gets it! Who loves what you’re doing and are willing to invest because they see the return on investment.

Master the price objection by joining Negotiation Skills Training

Profit, relationships and deals are won or lost during the negotiation process. When successful negotiators arrive armed with the tools and skills needed to negotiate effectively, desired outcomes are optimised, and loss of profit is avoided. The thing is, when it comes to negotiations, profits and closed deals aren’t the only desired outcome. That’s where our Negotiation Skills Training comes in. 

Preservation of the relationship is also crucial to ensure long term business opportunities and negative feelings aren’t harboured.

Sales professionals, procurement departments, and business leaders must learn how to navigate effective negotiations that positively impact both parties and inspire future business.

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