Why would anyone price something at $1,230?
The thirty dollars on the end of the $1,230 is lost. In fact, it gets in the way. If you’re going to cross over a hundred dollar barrier, then you should go all the way minimally to $1,270.00 or better yet $1,280.00.
The difference to the customer in how they see the price $1,230 and $1,280 is not as great as you think, so why leave $50.00 of pure profit on the table?
It doesn’t make sense unless what you’re selling is so price competitive. If it is then I’d rather spend time beefing up my sales presentation to make the extra $50.00.
Determining the price point you’re going to sell something at is certainly not something to be taken lightly. At the same time, don’t allow yourself to get sucked into not believing your own price. Price it right to allow you to maximize your profit.
Once you jump a barrier, go all the way. If you were at $490 don’t go to $530. Push it higher — at least go to $570. If you get into an absolute jam with a customer, you can always come down to $540, but that still leaves you with a $50.00 increase.
Using this approach also allows the customer to feel as if they are getting some sort of a major break in price. If on the other hand you went only to $520 and you have to discount something back, then you’re basically back to where you started. The only problem is you will have gone through a lot of work and receive nothing incremental for your work.
My belief has always been if you’re going to take a price increase and go through the effort of communicating it, then you might has well make it meaningful.
Copyright 2011, Mark Hunter “The Sales Hunter.” Sales Motivation Blog.
