For some reason salespeople always think if they can just lower their price, they can increase their number of sales.
In theory it sounds great. Sure seems like a basic economic equation.
The problem is that in the vast majority of situations, it simply does not work.
Here are 6 reasons why:
1. Somebody will come along and offer what you’re offering for a slightly lower price than your price.
Don’t think for a moment you are the only one who can offer a low price. As soon as you lower your price, you can expect somebody else to do the same.
2. The people you sell to at a lower price will be customers who can’t afford to pay you full price.
There will always be a group of customers who are seeking the lowest price, and if you think you’re somehow going to turn them into loyal customers who will pay you full price, you’re crazy. These people have zero desire to pay anything but the cheapest price.
3. The customers you attract will see value in what you’re selling at the lower price, but will not see value at the full price.
Why should they? If you sold it to them at a lower price, then that is what their expectations are built around.
4. Customers who haggle with you wanting a lower price are the same ones that will haggle with you over everything.
This is the bane of so many issues. Why do anything that would attract difficult customers? A smarter move would be to encourage them to buy from a competitor.
5. The lower profit margin you’re making selling at the lower price is not going to give you or your company the level of profit you need to operate.
If you’re not making a profit, there’s no way you can stay in business for very long. Not only do you need to make a profit on what you’re selling today, but you need to make enough profit to allow you to invest in building your business for tomorrow.
6. You’re worth full price! Do you view yourself as a cheap person? Of course not!
Perspective does matter and if you think you can make a sale only by lowering your price, then this will become your go-to method. It will become your “normal.” If you want to see yourself successful and capable of being at the top of your industry, then you simply can’t sell on price alone. And you certainly can’t make a habit out of discounting.
Copyright 2012, Mark Hunter “The Sales Hunter.” Sales Motivation Blog.
Bang on! That’s why I get mad when someone put down thier price so low! They are draggig my price as well.