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Offer reasons why your price is higher
Offer reasons why your price is higher

Reality Check! "Your price is too high!"

Too often, stores are paranoid about price without realising that a high pricing strategy brings benefits that outweigh discounting. DALE FURTWENGLER reports.

“Your price is too high!” These words strike fear into the hearts of business owners and salespeople like no others but the reality is that this is the one statement they should be happy to hear; it can be music to the ears of good salespeople.

Why? Well, because it opens the door to negotiation.

Now if you’re not an experienced negotiator I suggest that you take some classes, read some books and do whatever you need to do to develop this skill. It’s one that will serve you not only in your business but also in your relationships with family and friends.

One simple question

In the meantime, here’s one question that will help you launch the negotiation. When a customer says your price is too high, simply ask, “What would you like to give up?”

This simple question puts them on the defensive; they now have to explain why they think the price should be lower instead of you trying to convince them that your price is fair.

"When a customer says your price is too high, simply ask, “What would you like to give up?” They now have to explain why they think the price should be lower"

Often they’ll cite another store, usually online, where they can get a cheaper price. To that you’ll respond, “I have no doubt that you can find a cheaper price but what will you be giving up to get that lower price?”

Again, don’t be surprised if they say, “Nothing. It’s the same product.”

Agree that it is the same or similar product then ask what they’ll do when they experience any of the myriad of problems that can occur after the sale. How will those be handled? How will they feel dealing with a call-centre representative in a distant location that isn’t authorised to deal with their problem?

How will they feel when left to their own devices because exchanges aren’t company policy? If exchanges are allowed, how much time will they spend shipping the defective product back and forth instead of exchanging an item on the spot at your store?

The goal

The goal is not to denigrate your competition; it’s to help your prospect understand why your price is higher than your competitors. There are intangibles that are often overlooked that add real value and can warrant a higher price.

This approach also helps the customer to make conscious decisions about the choices they make. If the price really is outside their budget, it opens the door for you to guide them to alternatives that will meet the majority of their needs and provide an enjoyable experience for them.

It can mean tailoring the offering to their specific needs or suggesting alternative products after your questions have ferreted out what’s most important to them.

Logic vs Emotion

Retail experts will tell you that businesses looking to avoid a race to the bottom on price require the following three attributes:

  • Offer a distinct, differentiated product

  • Be authentic in their pricing strategies with an accurate understanding of the customer value quotient

  • Stay true to who they are as a brand

  • If retailers already know this, why don’t their pricing strategies reflect it? The short answer is that there is a huge difference between logical and emotional acceptance.

Anyone who has worked in sales, however briefly, has experienced the frustration of buyers refusing to make a decision even after acknowledging everything the salesperson says.

The lesson here is that emotions trump logic every time. I believe this is what’s happening with retailers; they know what they need to do to stop discounting but they can’t get past the fear of losing a sale to a competitor with a lower price.

Strategy

Here are three reasons why your sales strategy should include prices that are high enough to get prospective customers to say, “Your price is too high.”

It opens the door for you to:

  • High prices help you discover what’s really important to your customers versus what’s nice to have

  • High prices help you guide customers towards informed decisions that benefit both you and them

  • High prices help you increase margins despite what your competitors are doing.

Most importantly, high prices help you recognise early those instances when a customer really only cares about price. You can then limit the amount of time and energy expended in what will inevitably be a failed effort.

Once you’ve developed the above skills, you’ll find that negotiating is actually a lot of fun and a wonderful outlet for the creativity that exists within each of us so boost your prices today.











ABOUT THE AUTHOR
Dale Furtwengler

Founder • Furtwengler & Associates

Dale Furtwengler is the founder of Furtwengler & Associates. Hs is a speaker, author and business consultant. Learn more: pricingforprofitbook.com









Thursday, 18 October, 2018 06:07am
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