Your Price Is Too High!

Your Price Is Too HighWho in sales hasn’t heard these words?

Buyers have many ways of saying your price is too high:

  • “We are reducing down to only two suppliers. If you want to be one of them, you’ll need to sharpen your pencil.”  
  • “I don’t care about service, delivery or quality.  Price is all that is important.”  
  • “My guys sell what the customers want.  They don’t see the difference.”
  • “I need an incentive to cut off a long-term vendor.  You must be lower if you want me to do so.”

Remember, it is the buyer’s job to discount your value, while simultaneously securing it.

The forgotten elements of price that are part of your value

Overcoming Price ObjectionsMost everyone thinks of the invoice price and terms.

But these forgotten values of price are part of the total picture that you must paint for your merchant.

In other words, this is part of the value you are bringing, not just a price.

  • Growth rebates
  • Promotional allowances
  • Show specials
  • Special buys
  • Advertising allowances
  • Co-op plans
  • Pallet configurations
  • Terms
  • Dating
  • Price protection
  • Rebates
  • Pick-up allowances
  • Guaranteed service cycles
  • Merchandising allowances
  • Service
  • Packaging
  • Stocking allowances
  • Customer accommodations
  • Inventory consignment

And more that are unique to your industry.

Each of these elements makes up your pricing – and your value – to the buyer. Don’t forget them when negotiating and remember they all are eating away at your account profitability.

Your price is too high really means “You haven’t shown your value to me”

I Said Your Price Is Too HighSurvey after survey of retailers, dealers, distributors, contractors and homeowners shows that price is rarely the key driver in the decision process. In fact, it is usually 4th or 5th.

Make sure that the customer has truly earned and justified the price they need. Make sure you are comparing apples to apples and considering all of the forgotten elements of price. Understand what you are up against by asking smart questions and getting all the facts.

Once price is relinquished make sure you have gained something for the value you provided. Finally, communicate thoroughly, professionally and always be reinforcing your value.

Being competitive is more than just price

Lowest Price Is Not Always BetterWhat added value can you offer?

  • What else can we bring to the party other than price?
  • How can we help grow the customer’s sales?
  • How can we lower their cost?
  • Can we use any of our unique capabilities to keep from cutting the price?

Marketing is all about 4 P’s, only one of which is Price

Marketing MixMake sure you spend as much time understanding pricing as any other one of the P’s.

Pricing deserves respect, attention and creativity. You will be rewarded with greater profitability and be more competitive as a result.

Good Selling!

Greg Bonsib is an author of the new Mighty Guides Ebook Data Disruption.

Active Search Results (ASR) is an independent Internet Search Engine using a proprietary page ranking technology with Millions of popular Web sites indexed.

The Art of Raising Prices: Lessons from Amazon Prime

Harvard Business Review:


Raising PricesThink about what Amazon has done to convince us how much we will save with Prime. And how even a large price increase seems like a real value.

Read more on pricing from Channel Instincts at “Are You Pricing for Volume or Profit?” and “What Does ‘Your Price Is Too High’ Really Mean?”

Good Selling!

Originally posted on HBR Blog Network - Harvard Business Review:

With the economy on the upswing, most companies are contemplating increasing prices. Managers are rightfully anxious about making this move – it’s a sensitive issue for customers. While no one enjoys paying more, the right series of messaging tactics can tame potential backlash.

Amazon recently hiked the price of its Prime service, which includes two-day shipping, Kindle book loans, and streaming video. Raising Prime’s price is especially risky as it’s a key marketing conduit that draws in and engenders loyalty from customers. Analysts estimate Prime members spend over double compared to the average Amazon patron. With a P/E ratio exceeding 550, Wall Street is expecting Amazon to continue dazzling investors with eye-popping annual revenue increases. As a result, the Seattle-based retailer needs to keep Prime – its key engine for growth – in tune.

Amazon did a solid job of raising the price of Prime from $79 to $99. Given…

View original 571 more words

Are You Your Customer’s Biggest Fan?

Are You Your Customers Biggest Fan?Ever buy something that costs less than the thing you really wanted because it looked all right and somebody said it would work just as well?

Then, when it didn’t live up to your expectations, did you tell yourself you’d gotten what you paid for?  We’ve all done it.

Stop selling on product and price!

Yet, people continue to buy based on appearances and price…and to make them comfortable about products that can’t be tried before they’re bought, both makers and sellers issue liberal promises. Those promises are on the web, in advertising and sales literature. They are repeated by sales people, and reinforced by warranties.

But, customers sold on unfulfilled promises can be lost forever once they are unsold. The web and social media give these unhappy customers a megaphone to declare their disappointment, frustration and, occasionally, raw bitterness.

There is a way, however, to beat the price game, still make the sale, and keep the customer satisfied. The answer is to add value to your product lines.

Tthe way to do that is to stand out from the competition.

The real key to unlocking growth with your customers is to align your business with their needs

Key to unlocking growth with your customers is to align your business with their needsTruth is, having the right product at the right price and an acceptable level of service are the cost of entry today.

You have to stop selling product features and specifications.

You need to start selling

  • Service
  • Relationships
  • Customer success

Your customers, like all of us, are bombarded with thousands of messages everyday…family stuff, business, the news of the day, social media, advertising, email, sales promotion, publicity. The trick is to avoid having your message lost in the daily clutter. So your customers know who you are, what you have to offer, and that you care when they’re ready to buy.

Looking beyond products

Looking beyond productsIt’s the “care” part that makes you different.

You have to guarantee their satisfaction. Your sales people must be knowledgeable. You have to offer the best products available in every price range…best for the money, best for the application, best for builder, best for remodeler and homeowner satisfaction.

You’re an expert at what you do. That means you need to look up from the day-to-day business long enough to identify market problems and turn them in to advantages.

Do this customer by customer with the goal of being the supplier who is most committed to their success. Leverage your strengths as the marketplace expert and resource.

Why adding value is good for your business

Good for your businessThe end result? You will stand out in your customer’s minds. You will make your competition irrelevant because all they are selling is product. And if they are using price as their primary sales tool, this strategy makes price less important.

That’s why adding value is good for your business.

Because aligning to customer needs benefits you with…

  • Increased customer loyalty
  • Less price sensitivity
  • Higher sales

And, that helps you stand out in a crowded marketplace, beat the market’s economic swings and pitfalls, and increase sales profitability.

For other posts on value from Channel Instincts, see Are You Ready For A Dog Eat Dog World? and  Are You Delivering Real Value to Your Customers?

Good Selling!

Image via Shutterstock