If you are selling a premium product you know that it takes skill and discipline to compete against lower priced products, at least in the beginning…until you have some help from the marketplace.
If you are selling a higher priced product in your marketplace I am sure you can relate to the challenge of justifying why someone should pay more for your product. Am I right? Seems like everyone wants an ROI these days, and not just a realistic ROI analysis but almost a guarantee. Buyers are not parting with their money so easily these days, so how do you defend your higher price so you can win the deal?
I know the drill, because we live it daily with our services. In fact, I have always sold higher priced products. It’s a challenge but if you have more to offer then you have to defend your value and defend your price or it’s a slippery slope. It’s a win-win if you really do offer more at a higher price because your client will get a nice return on the investment and everyone will be happy, especially the salesperson! In the end, it’s really easier to sell a higher priced product after you establish the value because you will have less competition.
But, and I underline “But”, you have to sell value and be prepared to defend the price of a premium product or you should sell widgets and call it a day.
So how does this work? I will tell you what I have learned over the years…and it’s not easy, but, not everyone can be your client and sometimes you have to turn away business to defend your price and strengthen the value of your service. How many of us have heard a fellow salesperson say “$10K is better than nothing” You know what….that’s not true if it means lowering the price and deflating the value of your offering at the expense of other clients that have paid more. If your service is priced correctly, you know what…, you have to defend your price because it’s worth it. More importantly, if you don’t, it’s a sure way to put yourself out of business if you sell your services at the wrong price.
Have courage and sell with confidence. You have a great service and you deserve to get paid correctly for it. Ask your clients for testimonials, get referrals, anything that will validate your service and pricing.
Trust me, everyone will be better off in the end.
1. The clients that choose to spend more, because they get the value, will have a competitive advantage
2. The salesperson will get a bigger commission check, yay!
3. The business will drop more profit to the bottom line!
True story – We recently competed for a piece of business against a “competitor” that was 20% of our price. Guess what? We defended our value and we won the business because the client “got” the added value and was more than willing to pay the higher price because of the expected ROI.
Now go forth and defend your product’s value and higher price and everyone will be better off for it.
Brick
I like this post a lot! This is something I’ve experienced myself and have struggled with from time-to-time. Resisting the commoditization of your product can be difficult. I have a question: How do you compete with similar products that “appear” to offer similar benefits but have nuances that make the result and serve offer significantly less. Or when your product offers vastly more impact but it’s innovative and sometimes takes more time to sell than you have…education is always a hard one for me. I think other folks might want to hear about this.
Thanks Bruce. Compliments will get you everywhere….
Good question. Here is what I have learned, and it’s only through experience that you will learn this as a premium service provider. The market will tell you if you have a commodity or something special. They will tell you by their decisions, but only if you stick to your guns. If you give in to the natural buying pressure and lower your price to meet “the market” then you have given in to the buyer’s pressure to price you as a commodity and you won’t know the real value of your service.
I always tell my people that it’s very simple in business. Buyers want the lowest price and Sellers want the highest price, therefore the intrinsic tension in the sales/buying process. Buyers will always try and pull sellers down to the lowest price and try and convince you that your product is no better.
So…my belief is you have to stand strong if you believe your service provides more value and therefore a higher price. If it’s true, the market will pay your asking price. Once you get the first sale it becomes much easier to repeat this.
You have to have a strong stomach to sell a higher priced product!
Believing in a superior product and defending pricing integrity are two things I witnessed and experienced working with you and have continued to carry with me in my professional career. Sound advice.
Thanks for the support Drewski…this is my brah, Drew, yes? If you have a valuable service you deserve to get paid more for it but it’s up to the salesperson to execute. With all of the pressure to “hit your number” it ain’t easy sometimes but it will pay off in the end.