What is the objective of lowering your price to try and get more sales?
Anyone can get more business if they lower their price. It doesn’t take a rocket scientist to figure that one out.
Here’s the question you have to ask: What is the objective of lowering your price?
Too many times companies lower their price all for the sake of building the business, but all they wind up doing is attracting customers who don’t appreciate or value the full price.
These customers are many times driven solely by price; therefore, if they had to pay full price to receive what it is you’re selling, they wouldn’t do it.
Sure, you may have moved inventory and you may have created cash-flow, but at what cost to you and your company?
I’d say the cost is high, because it tells every other customer who did pay full-price that they paid too much.
Second, it begins to get you thinking that maybe the reduced the price is the right price you should be at.
Third, customers who are attracted to you on price will leave you as soon as you increase your price.
Wow! Those three things are a great way to kill a business. Remind me again why discounting your price makes sense?
The biggest issue of all is customers who are attracted to you because of your lower price tend to be needy customers. These are the ones who, because they don’t understand value, will harp and bug you over and over again the entire time they’re doing business with you.
These customers many times wind up taking valuable time away from not only you, but also other people in the company as they nag and pester on everything.
My suggestion to avoid all this nonsense?
Build your sales proposition around your full-price.
Instead of pouring resources into discounting your price, do things that help people understand your price/value relationship. Finally, be sure to remember that many times the best sale you’ll ever make is the one you never get. What I mean by this is sometimes a sale you could make at a lower price will wind up costing you far more than you ever imagined.
You tell me: Is your price attracting the customers you want?
Copyright 2012, Mark Hunter “The Sales Hunter.” Sales Motivation Blog.
Price is agreat steering mecanism, but I agree that if treated poorly, you skrew up you business.
Set a pricing strategy to steer how prices can be levereged and what products you are allowed to lower the price on. Gross Margin is the best measurement to steer price reductions, so a KPI for GM% is a must.
Why lower the price if you can bring in another article that has the lower price and the quality that accompanies that price. That way you can offer a lower price article, but you can steer the customers to buy your original article because it is a better match to the customers need, and the customer will thank you for it.
I can go on and on, but I’ll cut this short.
Contact me if you want some pointers: email@example.com
Good for you Mark. I appreciate your perspective and think you are right on track. Thanks for your perspective.