Quit kidding yourself!
You’re not making any money off the low-price customer, regardless of what you think. Let me give you 4 reasons.
Reason 1: The customer who demands a lower price from you is also going to be the customer who nags at you all the way through the sales process and long afterward.
Low-price customers are wired to think they can get everything cheap and they can get people to do for them whatever they ask. These customers are only doing one thing — taking up your valuable time.
Reason 2: A customer who gets a low-price is one who will tell others. Result is you will wind up having other customers expecting the same low-price or an even lower price than the first person.
Now that’s a great strategy for impressing all of your customers who paid full price. How do you think they’re going to feel?
Reason 3: Offering a price reduction is a drug you will find hard to resist. Once you give one price discount to close a deal, you’ll be much more likely to offer another one and another one.
Soon, all pricing confidence you may have had is gone and you’re left thinking you’re only worth the lower price.
Reason 4: The final reason low-price customers are destroying your business is low-price customers never see the value of the relationship. They will be far less likely to engage with you and work with you through the entire customer process.
Customers who pay full price understand value, and they value relationships. Having customers like that are going to help you and the entire company improve.
Playing a low-price game is only going to lower your profits and destroy your customer relationships.
It’s simple — If you want a short-term business, go ahead and lower your price.
If, on the other hand, you’re building a company that is going to last, then avoid the discount at all cost.
Copyright 2013, Mark Hunter “The Sales Hunter.” Sales Motivation Blog.
I think fear is the reason companies fall into this trap. Lowering a price is easy to do though, as you indicate, will hurt you in the long term.
It’s true, by offering low prices you also lower your status as an expert. I discovered this the hatd way.