If prospects and customers choke over premium prices, they may be taking their cue from their salesperson. According to recent research by The Brooks Group, one in three sales reps think their prices are too high.
Really, people? If you don’t believe in your price, who will?
If you’re among the nonbelievers, you have three choices: You can find yourself a different career – perhaps something involving a mountaintop cave. You can find yourself a cheaper product to sell – maybe something with lower commissions. Or you can stop thinking that price is a problem.
I recommend the last option, because it happens to be true: Price is never the problem. The problem may be:
- budgets (“It’s worth it, but I don’t have the money.”);
- value (“I have the money, but it’s not worth what you’re asking.”); or
- power (“It’s worth it and I have the money, but you need me more than I need you.”)
These are all problems that salespeople are paid to solve, but shuffling your feet and apologizing for your price doesn’t help. It only makes things worse.
Here’s what happens when you don’t believe in your price:
You lose credibility.
Prospects need to believe you and trust you. A study of high-end jewelers selling extremely expensive jewelry (six- and seven-figure price tags) found that the jewelers who stick to their guns on price are seen as more credible. If you telegraph that you have a problem with price, prospects will not thank you. They’ll think, “This jerk is trying to rip me off.”
You lose power.
Smart buyers will pick up on your ambivalence about price and use it to put you on the defensive: “It’s so much money!” they’ll whine – and expect you to start offering excuses and ultimately concessions.
To disarm the buyer, all you need to do is agree: “Yes, $30,000 is a lot of money for a wristwatch.” Then simply wait to see what happens next. There’s a reason the buyer isn’t looking at a Timex.
You insult your customer.
If you think a customer who pays a premium price is crazy or stupid, you’d be wrong. The customer is the only person who can judge whether something is worth it.
Case in point: A company is sourcing parts for a new product. How much more should it pay for a component with 99.99% reliability versus 99.9% reliability? They’ll know better than you — that extra decimal point may be the difference between success and failure of the launch.
You’re making life harder for the buyer.
A new study from Harvard Business Review illustrates this point. It found that the idea that most buyers aren’t looking to beat you up on price. They’ve got more important things to do with their time. Sure, they want a fair price, but if you start discounting, you complicate their lives. Now they have to check with other bidders to see what they’ll do — and explain to their boss why they almost overpaid.
You can’t do your best.
A high price allows you and your company to do right by your customer. You don’t have to cut corners on service or nickel-and-dime the buyer. A high price is a promise: It tells the buyer that they will be treated extraordinarily well. Once you’ve made that promise, of course, you have to live up to it. Whether you are in a B2C or a B2B sales situation, keep in mind that anyone paying a premium price knows they are doing so. And as a result, they will have a different set of expectations — higher expectations that you must not frustrate in any way.
When you think about how much a low price really costs you and your buyer, a premium price is nothing to be ashamed of. It allows you to give your buyer what they’re craving most: high value. So stop apologizing for your pricing and start celebrating it!