In meeting with a company that was attempting to sell me software, they committed what I consider to be one of the cardinal sins of selling … they made price an issue. They brought it up, even though I had never mentioned it. During the meeting, the sales person quoted me the price, but added she was sure she could do better if I placed an order before the end of the month. She then went on to mention that if I was looking at their largest competitor (I wasn’t), she might be able to give me some additional bonus offers to sweeten the deal. This sales person had now started me thinking I should do more research.
You might be thinking her an idiot, but she wasn’t. It is something I see all the time. Sales people always seem to complain that their customers want only the lowest price, and that if only their price wasn’t so high, they would sell more “widgets”.
I have told clients time and time again that price is not an issue for the majority of buyers in the marketplace. In fact, 4 out of 5 buyers do not consider price their number one criteria for making a purchase decision.
Pricing Pressure
Pricing pressure comes about in three ways:
- The buyer is not properly qualified and truly can’t afford you products or services.
- You have not done a good job of explaining why the value you bring justifies a higher price.
- They are a price-conscious buyer who only wants the lowest price (the 1 in 5).
Your issues with price are often self-inflicted wounds, so the question that you need to be asking yourself is “who has the problem with price – you or your prospect?” For the majority of my clients, the problem is with them, not their buyers.
You Lack Confidence
You lack confidence in either yourself or in your services, or perhaps in the overall value you bring to the prospect. In a lot of cases, it is all three. The problem is often that you have too much inside knowledge, and you have started to trivialise your skills as something everyone can do – and possibly even do better – so you start second-guessing yourself and your business. If you are not confident in what you are selling, how do you expect the prospect to be confident in it?
You Can Articulate Your Difference
If you want to charge a higher price, you had better do a good job of explaining why you are worth that money. If you can differentiate yourself from your competitors by bringing value that is relevant and important to the buyer, you can easily justify and command more money. Let me give you a recent example: I was talking to a web designer that charges, on average, double what her next nearest competitor charges. When I asked her what she brought to the client that justified the price of her services, it was obvious that she was prepared for that question. She had 5 points that distinguished her services from the other design companies. She also reached into her computer bag and pulled out a document that highlighted the same 5 points. Could you do that with your services?
Not Your Buyer
Not everyone is your buyer. The sooner you realize that, the better off you will be. The reason you want to closely qualify a prospect is to determine if they fit into your ideal target audience. Closely defining your target audience allows you to better focus on a prospect that is more likely to see value in your product and services. I love the quote used by Seth Godin, saying “If you want to sell nuts, you should be targeting squirrels instead of trying to change the view of dolphins.” Sure, you might be able to convince the occasional dolphin that nuts are delicious … but you would be better served by just finding more squirrels.
Next Steps
- View our upcoming webinar “Whose Problem is Price Anyway?” Here is a link to sign up for it.[spacer height=”5px”]
- Be prepared to differentiate your product and services from your competitors.[spacer height=”5px”]
- Spend more time qualifying your prospects.[spacer height=”5px”]
- Understand what true value you bring to clients. Talk to some of your best clients and ask them what they appreciate about what you do, and have them articulate what value your work has brought to their business.[spacer height=”5px”]
- Use that knowledge to craft some collateral marketing and sales pieces that demonstrate to the prospect your difference and those associated values.