Pricing what buyers mean when they say " You're to Expensive"
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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.
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Pricing what buyers mean when they say " You're to Expensive"
- 1. The Psychology of Pricing or Why we are frightened of raising our prices 17/07/2014 1 Managing High Growth
- 2. • 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” Managing High Growth
- 3. Common Misconceptions • The price is set by »A the Market »B Me 17/07/2014 3 Managing High Growth
- 5. Common Misconceptions I’ve got to be the cheapest to win »A True »B False 17/07/2014 5 Managing High Growth
- 7. Common Misconceptions If I raise my price I’ll lose my customers »A True »B False 17/07/2014 7 Managing High Growth
- 9. Common Misconceptions I must offer a Top Quality service/product at a Low Cost »A True »B False 17/07/2014 9 Managing High Growth
- 11. • You can offer a value service at a low price • Or • You can offer a premium service at a premium price 17/07/2014 11 Managing High Growth
- 12. Common Misconceptions When I lose its because I’m too expensive »A True »B False 17/07/2014 12 Managing High Growth
- 14. 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 17/07/2014 14 Managing High Growth
- 15. 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. 17/07/2014 15 Managing High Growth
- 16. 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. 17/07/2014 16 Managing High Growth
- 17. 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. 17/07/2014 17 Managing High Growth
- 18. • 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 17/07/2014 18 Managing High Growth
- 19. • That gives you your sales price 17/07/2014 19 Managing High Growth
- 20. Then add another 1% Managing High Growth
- 21. • 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! 17/07/2014 21 Managing High Growth
- 22. Action Points • Understand why customers buy from you • Know your costs in detail Managing High Growth
- 23. • Contact Me: • Laurence@managinghighgrowth.com • LinkedIn Laurence Ainsworth • Twitter @laurenceexigent • www.managinghighgrowth.com Managing High Growth