Could You DOUBLE Your Prices? (Read This to Find Out)
Charge more for your products and services without missing a beat.
Let’s set the stage.
You are finally meeting with a potential client you have pursued for weeks. After a few minutes of small talk, it’s time to get down to business.
“I want to thank you for your time today,” you say. “I’d like to go over my proposal to make sure you understand everything I’ll be doing.”
You launch into your presentation, starting strong and cruising through one point after another. Your transitions are smooth, your voice calm and paced.
Just like you practiced.
As you are talking, your prospect seems to be following along, interjecting the occasional, “I see,” and “Okay.”
Feeling confident, you prepare to wrap it up.
Just like you practiced.
You look your prospect square in the eye, calm, cool, and collected. “Shall we move forward?”
Then it happens. They ask the question you have dreaded all along.
“How much will all of this cost?”
Suddenly, the dam bursts. Your mind races, your throat gets dry. All that confidence you were feeling a moment ago is nowhere to be found.
As you search for the words to respond, a flood of thoughts rush over you.
What if they think my prices are too high?
What if they find this cheaper somewhere else?
Then this comes to mind: I really want the business so I’ll give them a deal. Besides, getting less than I wanted is better than nothing.
So much for practice.
Does the story above sound like something you have experienced?
If you said yes, you are in good company. Almost everyone who has ever made a sales presentation has dealt with price pressure.
I used to feel the same way. Even though I knew deep-down that what I did was worth every dollar I charged, I just could not stand the thought of losing the sale over my price.
Customers are hard to find. It is tough enough to find someone who will give you the time of day, much less listen to your presentation. To make it that far only to lose the sale over price is like being thrown out at home plate while trying to score the winning run.
In this article, I am going to reveal what I have learned about price positioning over twenty-five years of selling. I will explain the biggest challenge you face in convincing people to buy and show you how to have more confidence than ever in your price.
You may even discover that you could be charging more.
Does price matter?
I will start by saying that—with only a few exceptions—price does matter. People care about how much they pay for something.
However, price is not the primary consideration for everyone when making a purchasing decision. There are other factors that play a deciding role in the buying process. I will share those in moment. But before I go on, I would like to make it clear that there are two groups of people you are selling to.
The first is price shoppers. These people consider price the sole qualifier for everything they buy. As far as they are concerned, nothing matters more. Whether they know it or not, they are willing to sacrifice quality to save a few bucks.
This doesn’t make them bad people. Many of them truly believe that despite paying less, they will receive comparable quality or value.
Maybe they pride themselves on getting a deal or perhaps they just aren’t knowledgeable enough about a specific product or service to make educated comparisons. Maybe they focus on price because they made poor choices in the past that left them feeling foolish.
It doesn’t matter what their reasoning is. This group of people will be the toughest to sell. In their view, you are not any different than anyone else that does what you do, you are only trying to charge them more.
I strongly suggest staying away from these folks. Targeting them sets you up to encounter more price resistance. You will find yourself in one conversation after the next, trying to convince them that what you offer is superior to the alternatives.
Eventually, having these conversations will suck the life out of you. As extreme as it sounds, trying to convince price shoppers to buy can leave you wondering if your product or service has any value at all.
They Don’t Want What They Need
The second group of people you are selling to has a different buying process. They don’t all buy for the same reason and will use other factors besides price to determine which product or service to purchase.
This is the group we want to focus on. They want what you are selling but need some assurances before they hand you their credit card.
Notice, I said they want—not need—what you are selling. People don’t always know what they need and often don’t realize it until after they have made the purchase.
You will have more success turning these people into customers if you focus first on what they want. They must believe that you understand them better than anyone else and that you can empathize with their circumstances and problems.
If you can establish a connection with them, they will become more comfortable engaging with you. Only then will they begin to realize that they have found someone who “gets” them and who may be able to help them. But even giving them what they want and forming a connection with them is not enough.
We must still prove our value to them.
The value we offer through our products and services must be definitive, not subjective. It must be clear, direct, and in tangible form. Otherwise, we leave it up to the customer to figure it out for themselves.
When you leave it up to them, they will make assumptions about what you do, which means they will not see the unique value you offer.
Up to this point, you have given them no reason to believe you are special or offer anything they cannot find elsewhere. And if they think your offer is like everyone else’s, why would they pay more for yours?
They won’t unless you differentiate.
Most businesses have a hard time differentiating because they go about it the wrong way. They focus on selling features and benefits instead of the transformation the customer gets from using their product or service. They just hope if they throw enough knowledge and terminology at people, they will get them to buy.
Of course, if nothing else works, they can always sell for less. But you want to charge premium prices. So, let’s look at a process that will help you do that.
The Buying Factors
Essentially, there are five factors our prospective customers use to make purchasing decisions. They are:
Here’s a quick look at each one.
Most often, people think of quality in terms of how long something lasts or the excellent value they receive. Compare your product or service to those of your competitors. What can you offer that they don’t?
The quality of physical products is based on its performance. If you want to establish that your product is superior in performance, provide your prospect with details on how well it is made, how long it will last and that the materials, ingredients, or manufacturing process is better than those of your competitors.
For service providers, quality is founded on expertise. The better you are at something, the more you can charge for it. To demonstrate your expertise, you can establish authority by educating your prospective customers through articles, e-books, videos, and other media.
“If you’re good at something, never do it for free.”Heath Ledger as the Joker in the Dark Knight
The definition of delivery is industry specific. It could mean that it is available every single day of the year, no back-orders. For service industries, it could mean being available twenty-four hours a day.
Whatever it is, if you say you can or will do it, you must be able to back it up every, single time.
Research has shown delivery to be the number one buying factor for most consumers.
What happened to great service?
I’m not sure but it is getting harder to find. The Bible tells us to “Do unto others as you would have them do unto you” and I couldn’t think of a better way to grade customer service.
According to this research, 65% of consumers want to feel a connection to the businesses they buy from.
But how do you build that connection?
By building a brand.
If you are not intentionally connecting with your target customers consistently, you are missing out on a lot of revenue.
Last, but not least, we must carefully determine what our price will be. Once it is in place, we must be prepared to defend it and stick by it.
Many small business owners discount the price of their product or service simply because a prospect questions it. This is unfortunate because the prospect is usually unqualified to determine what the price should be.
To support your prices, provide proof beyond a reasonable doubt. This involves creating an airtight case for the quality and price of your product or service.
The quality of your product or service sets the stage for success. Marketing and advertising only expose the weaknesses of a poorly designed product or enhance the appeal of a strong one. Businesses must weigh their offer against all of the buying factors above compared to those of competitors. This reveals needed improvements that will raise the standard of your product or service.
This will also make it much easier to justify your prices. There is an emotional element attached. When a consumer believes they are getting exceptional quality, delivery, and service—even a higher prices—the value of what they are getting versus dollars paid becomes less of an issue.
Buying Should Be an Experience, Not a Transaction
Premium brands know how to create a powerful customer experience, which leads to more sales at higher prices. In fact, it is why they are able to charge 20% or more for their products and services. Sometimes it is possible for these businesses to double their price over a short period of time without any pushback.
Until next time,
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