pricing what buyers mean when they say " you're to expensive"
DESCRIPTION
This short presentation looks at why so many businesses are reluctant to increase their prices often through misconceptions about their ability to control the price they charge, and how price objections are more often than not used as a cover for other objections.TRANSCRIPT
The Psychology of Pricingor
Why we are frightened of raising our prices
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• Business Owners and Sales People alike often put failure to close new business to price:
• Through common misconception on how to price correctly
• A failure to understand the possible reasons behind “Your too expensive”
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Common Misconceptions
• The price is set by
»A the Market»B Me
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Answer B
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Common MisconceptionsI’ve got to be the cheapest to win
»A True»B False
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Answer B
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Common Misconceptions
If I raise my price I’ll lose my customers
»A True»B False
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Answer B
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Common Misconceptions
I must offer a Top Quality service/product at a Low Cost
»A True»B False
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Answer B
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• You can offer a value service at a low price
• Or
• You can offer a premium service at a premium price
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Common Misconceptions
When I lose its because I’m too expensive
»A True»B False
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Answer B
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People buy Products / Service on more than price.
• Your most loyal customer buys from you not only because he likes the price of your Product/Service but for a whole range of other reasons including,
• service, • convenience, • location, • inertia, • loyalty, • lack of alternatives
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What Buyers Really Mean When You’re Too Expensive
• You're visited by a salesman who can't articulate the benefits of his product. What do you tell him when he asks for the business?
• I’m sorry but your presentation did not make sense
• OR
• I'm sorry but you’re too expensive.
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What Buyers Really Mean When You’re Too Expensive
• You're visited by a salesman who you just don't like. What do you tell him when he asks for the business?
• I’m sorry but I just don’t like you and I’d rather cut my leg off than give you the business
• OR
• I'm sorry but you’re too expensive.
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What Buyers Really Mean When You’re Too Expensive
• You're visited by a salesman who is selling an old outdated product. What do you tell him when he asks for the business?
• I’m sorry but your product isn’t up to it?
• OR
• I'm sorry but you’re too expensive.
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• Work out what it costs for you to sell your product/service in Detail
• Include ALL overheads as well as labour and materials
• Decide how much profit you want to make and add that to your costs
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• That gives you your sales price
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Then add another 1%
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• Don’t be afraid of increasing price• Increase prices regularly• Declare price increases if a major cost
component increases• Regular price increases conditions your
customers to expect price increases• Not increasing prices conditions your
customers not to expect price increases!13/04/2023 21
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Action Points
• Understand why customers buy from you
• Know your costs in detail
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• Contact Me:
• [email protected]• LinkedIn Laurence Ainsworth• Twitter @laurenceexigent• www.managinghighgrowth.com
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