Presenting your price with confidence is vital with costs going the way they are in today’s economy.
How can you maximize your revenue and avoid buckling under requests for a discount?
In addition to these five rules, I have a lot more to share with you about pricing that you’ll wish you’d known earlier. Don’t wait another day or make another mistake when presenting your price. Get my Pricing Masterclass today!
1. Lack of confidence leads to unnecessary discounting.
More discounts are given based on the failure of the salesperson to believe in their own price than are given based on the demands of the customer.
Sure, a lot of customers demand price decreases. But more often the real reason they cave is the salesperson isn’t convinced themselves.
So what happens? They think the customer’s looking for a price discount, so they give a price discount. Or, when the customer goes silent, the salesperson thinks, “Oh it’s because my price is too high.” They cut the price. It’s too easy.
I challenge you to believe in your price. Believe in the outcomes that you can create for your customers.
When you present your price with this mindset, you won’t feel tempted to succumb to buyer’s tactics.
2. Never discount a price to get a deal.
All you’re doing is giving away money.
Some people think, “Well if I just cut my price now, I’ll be able to make it up in the long run.” Unfortunately, this just isn’t true. The price cut you give them becomes the price perception and the price belief that the customer takes to the bank for the next one.
Just because you give them a price discount now doesn’t mean they’re going to pay full price next time. Worse yet, some salespeople will hear “Oh, well give me a price discount and I’ll bring you a lot of business later on.” It doesn’t always happen, in fact it rarely happens. They just got a lower price out of you, that’s all.
In addition, when you discount to get a deal, you attract customers who could never afford to buy from you at full price. Now you’ve got a real problem. You’ve given away your goods or services at a lower price, so you’ve attracted customers who can’t afford to buy from you at full price. If so, you’re in a real bad situation.
3. The most profitable sales can be the ones you don’t make.
You have to be prepared to walk away.
“Well, if I just cut the price a little more, and a little more, I’ll get the deal.”
However,if you cut the price so much that you don’t make any money off of it, you would’ve been better off walking away from it. This is especially true with bids and contracts.
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4. Selling price is not what counts. It’s the profit you make that matters most.
For example, you may make a 20% margin on an item. We’ll say it sells for $100, so your cost of goods sold is $80 and you make $20. Then, your customer asks for a 5% discount. Perhaps you’re thinking to yourself as a salesperson, “That’s only $5 off of 100. That’s okay.”
No, it’s not a 5% discount. It’s a 25% discount, because you’re not changing your cost of goods sold. You’re only changing the profit that you’re going to make. And suddenly instead of making $20, you’re now making $15.
It’s not the selling price, it’s the profit you make.
5. Low price is not a marketing strategy.
You sell a low price, the customers you attract will leave you when a lower price comes along.
Somebody somewhere, sometime, somehow will come up with a price lower than you, and your customer will leave you.
Customers cannot be expected to pay a premium price until they understand the value you bring.
There’s a lot to consider before you talk price, and I cover it all in my masterclass, Pricing: How to Avoid Discounting and Sell at Full Price.
I’ll cover ROI presentations, value propositions, as well as my rules for pricing, and how to respond to common pricing objections and issues. But that’s not all! See the full course contents here.
It’s our biggest masterclass yet, and still only $59–an incredible value for 12 instructional videos and accompanying workbook. Enroll now.
This week on The Sales Hunter Podcast:
How much talking should you do on your discovery call versus your demo?
Learn the answer and join us this Thursday as we welcome Lee Salz to The Sales Hunter Podcast.
In this episode, Lee and Mark discuss topics such as how to start with a solid foundation with your discovery call, and the important relationship between the discovery call and the demo.
You’ll find this episode live on Thursday morning, or you can find more episodes of The Sales Hunter Podcast here.
Copyright 2021, Mark Hunter “The Sales Hunter” Sales Motivation Blog. Mark Hunter is the author of A Mind for Sales and High-Profit Prospecting: Powerful Strategies to Find the Best Leads and Drive Breakthrough Sales Results.