I’ve had a lot of discussions lately with clients about pricing and how to determine what the right price is. I believe that your product or service is under-priced until you have lost at least 10% of your potential business due to price. (The % is not always the same for every industry….call or email me and I’d be happy to explain how to determine what your exact % should be.) However, before saying the business is lost to price, make sure it really is because of price. I often find customers will say the price is too high, when really it’s just the price/value relationship is not high enough. Price increases cause problems when a company institutes a price increase without really thinking through their pricing strategy and how they will expose the customer to it. Note my word choice of “expose” instead of “explain.” “Explain” automatically conveys a lot of talking by the salesperson. “Expose” uses questions to get the customer engaged, and to allow them to explain to you what they feel the price / value relationship should be. Unless you can objectively and authoritatively say you’ve lost 10% of your potential business to price, you cannot even begin to say your price is too high.

A word of caution: don’t use this to justify why you should institute a price increase. I’m a firm believer that once you take a price increase, you don’t step back from it. If you’re facing resistance, it really means you need to step up your sales and marketing efforts even more.

Later this year, I will be releasing my book, High-Profit Selling, which has an entire chapter dedicated to this topic.

Download the Ultimate Email Prospecting Guide today!

Enter your information and we'll immediately send you our most popular download, and add you to our weekly Sales Tip newsletter.

Thank you, for subscribing. Your E-Book will be delivered to your email inbox soon. I work hard to bring you content that will move the needle! Great selling.

Share This