Earlier this month Mark Hunter of The Sales Hunter fame came out with a short and “dead on” accurate article about the serious consequences of slashing prices for the sake of making a sale. Now some of you may say this topic is being beat to death. I hear sales people constantly saying they understand and they realize the impact of such actions and so on and so on… But for some reason (and for far too many sales people) when it comes down to crunch time selling price suddenly becomes flexible. So now everybody, let’s review once more why selling on price is not the path to success;
- Somebody will always 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.
- 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.
- 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.
- 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.
- 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.
- 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, it 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.
Mark’s list is pretty comprehensive and the points are all valid. I would add one more: The customers’ perception of value goes beyond just the product or service you’re offering. That perception extends to you personally. If you’re ever going to be considered as a valued advisor or consultant i.e. sales professional – caving in on price whenever the negotiation process becomes difficult will destroy any creditability you may have established in the eyes of your client. You become just as much a commodity as the product or service you’re selling. And, you can be just as easily replaced by the next shiny bauble or offer which walks in the door.
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