Your Price Isn’t Necessarily Too High, Part 1
I’m taking a break from the list of strategic pricing tips for a blog post or two. Time to mix it up. I keep hearing this from clients and audience members at my talks: your customers tell you that your price is too high. That means it is, right? Maybe. Maybe not. Consider this:
- Customers only tell you when your price is too high. You don’t ever hear when your price is too low. Sometimes your price is much lower than your competition, and you never find out how much money you left on the table. You are extrapolating the price complaints across your entire business and letting those complaints infect your sales thinking.
- It is rational for customers to try to get the best products at the lowest price. Asking for lower prices is your customers’ job. It doesn’t make your customer a jerk. It doesn’t mean your prices are actually too high. It means your customer is a rational consumer seeking the best deal.
- If your customer really believes your prices are too high, there are three possible explanations: #1 you don’t have a product that is worth enough, #2 you don’t have a well developed value proposition, or #3 you aren’t telling your value story well enough. If you have problem #1, your problem isn’t pricing. Your problem is your product, and that needs to be addressed first. Most of my clients face problems #2-3, and they are walking around with a massive inferiority complex about pricing because their customers keep telling them their prices are too high. The best way to combat pricing objections is a rigorously developed value proposition delivered by people who are well trained to deliver it confidently and convincingly.