Have You Been Told That You Need to Cut Your Prices to Get
Most business owners simply haven’t got a clue how to
set their prices, and so they try to be the cheapest. The truth is that having the lowest price is not really an advantage,
and having the highest price is not really a
Because, price is rarely ever the main factor in selling.
Most customers don’t want “cheap” – they want good value,
a sense of pride and peace of mind.
Business owners tend to look at what their competitors are
charging and then set their prices a little bit cheaper or
bang in the middle. This is a big mistake. It leaves you wide open for attack.
You’re failing to differentiate your business from your competitors.
Truth be told, this is a weak approach made by entrepreneurs who
are too scared to increase prices and lose existing or new customers. Or they’re worried about what
their competitors think. I made this mistake myself plenty times in the past, but you’ll never be
truly successful with that mindset. A real paradigm shift is in order.
If you live by price, then you die by price.
All it takes is one of your competitors to undercut you, or the
tiniest downturn to wipe out your measly margins, and you’re screwed!
But once you escape a price competitive environment, via
positioning and good marketing, you really can “set your
own price” for any product or service you offer.
THE WORST THING YOU CAN EVER DO TO GENERATE MORE MONEY IS CUT YOUR
On the other hand, if you deal with price resistance by arguing
that your services are of a higher quality, you’ll still
find your sales work difficult. Yes, people do want superior goods and services, but they don’t
necessarily want to pay
premium prices for them. A lot of business owners fight this battle every day with their customers,
and it’s demoralising.
The secret is to switch the standards of comparison.
Compare apples to oranges, and throw in the superior
quality at no extra cost. Reinvent your products and services by packaging them up. Add
value, bundle goods and services together, offer warranties, tack on cast iron guarantees,
throw in desirable bonuses, create payment plan options, and sell VIP membership clubs.
You can always charge more for these extra services.
There are other ways to mix it up as a well. Here’s a simple idea
that applies to a wide range of industries. If you offer a service, throw in some products, and if
you offer a product, include a service.
Here’s another. If you’ve already set your prices for a product or
service and don’t want to change things, that’s fine. Keep the existing offer at the current price,
and design two or three premium package options, like “Gold” or “Platinum.”
Give your customers several choices, and they will most likely
choose the middle option, as long as it’s appealing enough.
This is one of the most powerful sales tactics about which I
Which reminds me …
The Old Tricks Still Work Best
Some of the best sales tactics have worked for thousands of years
and still work today. For example, the salesman says, “This ‘widget’ normally costs $150, but you
can have it today for just $99!”
Okay, your customers aren’t stupid, and neither are
We all see right through these simple gimmicks.
But guess what? THEY STILL WORK!
We all love to think we’re getting a great bargain, even if we
subconsciously realize we’re fooling ourselves. Then we
rush home to tell everyone about it because it helps justify buying the damn thing. “Well, Mary, it
was actually priced at
$150, but I got it for just $99. How bloody smart am I?”!
Savvy business owners and marketers learn to change the rules of
the game and set their own prices based on how much they want to make. Forget about playing fair.
All your life you’ve been conditioned to play fair, and that subconscious conditioning is holding
you back. It’s time to change the rules to suit you and your business.
And guess what happens when you charge more for your services? You
make more money! That’s right – there’s more
cash to go around. That means you can spend more on marketing, hire more staff, pay better
salaries, pay yourself
more, and deal with less customers.
Many years ago I ran a carpet cleaning business. It was called
'Genuine Carpet Cleaning'.
I was the most expensive carpet cleaner within the entire
state of Sydney Australia. I owned a very unique and up market vehicle and set up which was at the
time one of the most expensive and professional setup's in the entire industry. I dressed the
part (long black pants, dress shoes and a clean company collared shirt).
When I turned up at a clients home they knew I was going to
deliver something special.
I carried the most outstanding guarantee in the entire industry
that left no risk to the client.
Where most other carpet cleaners were charging $15 per room I was
We were different!
Sometimes we even got cheeky emails from our competitors. They
told us we were “ripping off” our customers by charging “too much”.
Actually, I firmly believe THEY were the ones ripping off their
customers by charging less and cramming more jobs
into their day. Most of our competitors were doing 6 to 9 jobs a day where I was only doing 2 to
3. They were robbing their customers of a quality cleaning experience. This also meant they
were unable to afford good support, and they never had enough cash to invest in marketing. As a
result, we made more money and enjoyed higher profits than they did.
Dozens of my competitors from back then have since gone
Beating your competitors is all about finding or inventing an
unfair advantage for yourself. Make price comparison
impossible for your customers. Make it impossible for your competitors to keep up with you. And,
who cares what they
think? If they’re pissed off at you, you’re firmly on the right path to success. If they are giving
you shit, they are the ones experiencing negative emotions, and it’s probably because you’re
The more shit they give you, the happier you should be!
All for now,