It’s not hard to find contractors who think they are losing jobs because their competitors have a lower price than them. How many are losing jobs because they lower their price instead of standing firm?
That is a question that is much harder to answer. Especially since most people do not want to face the truth. The truth is that you will lose far more sales with a lower price or worse yet, by lowering the price you have already given than they ever will by having a higher price than your competitors.
5 Reasons Why Lowering Your Price Could Cost Sales
1. You Look Like Your Competitors – Do you really think that having the lowest price will make you stand out? Every other salesperson says the same thing. Everyone claims to have the lowest prices because they think it will get the customer’s attention. Even if it did make you stand out, it would be for the wrong reason – the very wrong reason of offering a watered-down version of what people really want.
A higher price with a more premium package is really the only way to look different from your competition. Offer something better that no one else can offer. A lower price just isn’t it.
2. It Takes Focus Off Your Customer – Price does not determine the sale; your customer does. That means that your attention should be completely on them. Everything you do should help you understand and connect with your customers so that you will discover their motivation for buying.
Customers search for a product that is the best solution to their problem. They understand that a product cannot be the lowest priced and still be the best. Making the sale requires that you find the best solution, not the cheapest.
3. It Decreases Perception Of Your Value – Before every purchase, a customer considers, “Is this worth it?” The answer depends on the value of the product, not the price. If they envision themselves using and benefiting from the product, the answer is yes and the purchase is made.
Without value, a product won’t be sold at ANY price, so don’t limit your customers to a dollar amount. Establish value by helping them imagine how useful and enjoyable your product could be in their daily lives.
4, It Brings Your Integrity Into Question – Customers will not buy from you if they don’t trust you; and they definitely won’t trust you if they feel that your price is dishonest. Lowering the price of your product suggests your product was not really worth what you were asking for to begin with. They will believe you are padding your price!
Never lower your price because you know that your service is worth every penny. Have confidence and enthusiasm for your own product. If you believe in what you sell, your customer will too.
5. It Leads To Buyer’s Remorse – Customers want to feel confident in their purchase and know that they received the best value for their money. Lowering the price for your customer puts them in a situation where they feel haggling is necessary. They will question their purchase and wonder if they should have pushed you harder to lower the price.
Even though it seems you saved them money, they will probably feel ripped-off. This will make them uncomfortable with your business and less likely to come to you in the future.
A Limited Strategy
When you lower the price of your product, you are limiting your sales strategy to a dollar amount. Price becomes a dominant part of the conversation ONLY because YOU have made it one.
When was the last time you heard your price was too low? This is probably the first time. We can assume that in all our sales interactions, odds are that – at least SOMETIMES – our price MUST be too low. If that is the case and you have never heard this until now, then I am glad you are finally enlightened.
Focus your attention and sales presentation on what really matters: the customer, the value, the uniqueness of your company and your product. When these things are put first, price will always come in second.