Selling Based On Price – Why It Is Bad For Business
When you are out in the field pitching your product, everybody wants a lower price. They want you to beat the price of the other guy, give them a better deal, save them a little cash. Here’s why you should say no.
The price of your product is a symbol of it’s value. If you price your product at $1000, then you must believe that a customer is going to find more value in your product than they do in their $1000, so your product is worth some amount more than $1000. When a customer tells you that you need to lower your price, they are saying that your product doesn’t have enough value to be worth the $1000 that you are charging.
As soon as you enter into pricing negotiations, you are agreeing with the customer. You are telling them that they are correct, your product doesn’t have the value that you first claimed. You begin backpedaling, well maybe it’s worth this much? This much? Instead of managing the transaction, you then become the victim.
When a customer objects to a price, they are saying that they don’t see $1000 worth of value. If you believe that your product has more value to your customer than $1000, it is your job to show them why. If your product truly has more value than the price you are asking, then you are doing your customer a disservice by not showing them why and bringing them to the close. If you are the best installer, with the best products, and the best customer service, find a way to show that to your customer, and prove to them that your product is more valuable than what you are asking.
Entering into price negotiations is telling everybody that you don’t really believe your product is worth what you are asking. If that is the case then you should lower your price to reflect the actual value that you bring your customer. If you don’t believe your product has value, and you don’t completely believe that your product is the best option for your customer, than you shouldn’t be selling it.