I have lost money to unneccessary ” okay, let me remove for you”.
The reason I hate this so much for first time customers especially is that
- It teaches customers to always expect discount
- It gets you into price wars with customers
- Too often, you loose money
These are usally the lines customers will use to wash our head while asking for reduction in price
- You know economy is hard
- I just saw this somewhere else for a cheaper price
- I dont have money
- This is not what I budgeted
Which other one have you heard? I heard plenty when I was in e-commerce.
But, I can bet you a million bucks, 90% of the people who have said these will buy thesame product from someone else charging 3 times your fee.
One of the main peice of advise expert sales men like Richard Denny, Zig Ziglar, Brian Tracy and even expert advertiser, David Ogilvy gives is AVOID PRICEITIS
This is “the disease of competing on price.
The only time competing on price is okay is if you have the walmart effect ” Large orders hence lowest cost and in turn, lowest prices”.
So, what can you do to ensure you are making sales when you cannot say “Okay, let me remove 1,000 naira for you” include:
1. Increase the variables
Provide more options but not too many so that you do not confuse the client.
For example, a shoe company can have a line for N5,000 and another line for N15,000.
That way, when a client with little money comes, you can give them options without having to concede on your prices.
Also, it will be wise to make sure the higher price options have higher value than the lower ones.
For example, the lower ones may be pretty and well made but, the shoe seller can decide to make sure their designs are basic and, the ones for N15,000 are rare designs that are jaw dropping gorgeous.
2. Increase the value so much, the price makes complete sense
I saw this with my sister recently in her business and I have seen it in action on certain saas websites.
My sister recently wanted to increase the price of her e-books from 3,500 to 5,000 naira.
She knew there will be push back from her audience and she didn’t want to reduce her price.
So, she did something incredible.
She made the new e-book hold 21 recipes for hair care versus holding 12 or 14 whoch her other e-book had.
21 recipes for 5k is a so much value when people are buying 1 recipe at say, 2,000 naira.
She sold to 5 people even before the e-book came out
3. Change your target audience
I know this sounds extreme.
But, if the other two options just do not work for you, this is the next direction to go.
If you are selling to bargain shoppers and want to start selling to a higher end customer, this involves you looking for high end customers to fit that aspect of your business.
There are three ways this can go
- Change target audience completely
- Create an entirely different business for higher end customers while keeping the one for bargian customers
- Advertise to get higer end customers and creating different product options for different people
Anyone you choose has its own challenges especially on cost.
The main thing when doing this is to ensure that you aren’t loosing money.
Ensure that for all your prices, you aren’t loosing a penny.
Get costing , pricing and margins right.
4. Change your USP
Different USP’s operate on different levels of need.
Our target cutsomers all have problems but, these problems offer different levels of pain.
For example, before Nike, there were different sports shoe companies. They offered one basic need ” shoes for sports”.
When Nike launched their first shoe, waffle trainer, Bowerman, Nike co-founder was trying to solve a different problem.
A more painful one.
Bowerman had been trying to create shoes that would have soles without spikes and that could grip equally well on grass or bark dust.
The reason being that such shoes will be lighter and faster hence, they will make running a lot easier for athletes.
Imagine you go to sell two shoes to an athlete.
You say ” This shoe is very well designed for athletes only” for shoe 1.
Then, you bring out shoe 2 and you say,
This shoe is lighter, fits like a glove and extremely comfortable making it 10X easier for you to run “
Which do you think the athlete will go for?
Do you think the athlete will pay more for the latter versus the former?
Find out what higher pain points your target customers have and then, build your product around it.
If it solves a more painful problem, they will always be willing to pay.
5. Set a high price, run a discount but make sure your full price is already added.
Deceptive I know but, customers can be deceptive and you want to win them at their own game.
Customers love the sound of discount.
The higher the discount, the more enticing something is.
How excited do you get when you see someting you like going at 70% off?
So, apply this for your own business.
Let’s say the price of your product is N5,000. You can decide to set it at N8,000 and provide a discount of 30% off for the first 10 buyers.
Do not keep the discount forver or people start to feel like the product is bad but, you can set it for a number of people or, you can set it for a limited time.
We see this with businesses in the service industry that use terms like “early bird price is…”
6. Dig Deeper to know what is valuable and then, use that to make a concession on price
For example, a customer could say
“I very much love this product but, I dont have the money to buy it now”
“Is there anything else that you considering outside price that is holding you back from buying the product, please be honest”
Could help uncover some hidden truths.
Another way to go would be asking
“what is the end goal you want to achieve for buying this product”
if it is an information or service related product, this will help.
You could also pick the challenge mentioned which is “money to buy it now- TIME” and say
” Okay, I will give you an extra one week for it after which, i will sell it”
“registration deadline is in two weeks after which, it will be closed so that you have time to raise the money” will also work.
The point is to dig deeper and find something valuable the person wants to achieve with your product or service.
Then, make a concession on that but never on your price.
You can read this article by Havard business review to understand thos even further and learn some other techniques.
What are the challenges you face when it comes to sales in your business beyond price.