Everybody loves a deal. But you’re most likely to compete – and win – on price if you focus on these four factors.
Why do some people consistently get “full price” while others cut their commission frequently? Do some customers drive a harder bargain than others? Is the customer always right? No, not really, because when it comes to sales, most of us get paid exactly what we believe we’re worth.
And that, my friends, is the key to protecting your commission!
In fact, the best salespeople discuss price right away. Pricing, after all, is the best way to communicate your value and worth to a client. Avoiding price discussions only tells customers you’re not personally certain you’re worth it. I’ve always discussed price – on the first call, in the first email, at the first meeting – because my price informs clients about what kinds of work I want to do, and sets the grounds for dialogue.
Your price can do the same for you.
How can your price help you? In our experience, these four tips for a pricing strategy will help you reach your goals consistently. Even if you decide to “change” your price for a certain client at a certain time, you’ll do so with full intentionality – and for the right reasons. Plus, if you think about them, these ideas apply beyond your “fee at work” to the price of your participation in any social interaction. As you will see, price is merely another way to express to others what you believe you’re worth.
- Clarify your Value Proposition. Salespeople who win on price clearly understand their value proposition. They keep customers from focusing on what they do and instead focus them on what they help customers achieve. If you focus too much on the steps, tools, technologies of how you work, you will dissect your value proposition right in front of the consumer! Suddenly, you’re nothing more than things and activities. Yet the sum is always greater than the parts. Keep focused focused on the outcomes you have achieved for past clients. That’s really the only valuable message in your presentation.
- Easily Explained Pricing Strategy. Why do you charge what you charge? Salespeople who can explain their pricing structure in simple terms will appear more confident and deserving to customers. Remember that the central factor in price is time. You can only create so many outcomes for customers in a given year. Whether you sell homes, defending lawsuits or deliver seminars, time is at the center of your pricing strategy. Time plus outcomes is what you must price. How many outcomes can you create in a given year, and how much does each need to contribute to your budget? It’s that simple. Even margins are based on time. As time runs out, margins must be protected, since you’ll create the same outcomes, with less time to do it.
- Ideal Deal Profile. Successful salespeople work from an “ideal profile” of a good deal. They don’t jump at any deal, or worse, ignore prospects without qualifying them against an ideal. They never believe they can do a few bad deals, but make it up in volume (see #2 for why this fails). Ideal deals create a mutual win for salesperson and customer. With an ideal profile, you can pursue the right work, and avoid the dangerous deals. This helps you pick deals that are worthy of your price.
- Intentionality. As we’ve mentioned before, great salespeople create income in order to reach their personal goals. They work for a reward’s sake, not money. Every sale is another brick in the cathedral of their career. Every deal is engaged purposefully, as another step towards achieving a personal, professional or social goals. With that in mind, securing the right price becomes a necessary part of work. Price becomes as important as technique, technology or volume. Reducing a commission, if done, only occurs when absolutely necessary to move closer to a goal, and even then, only if a profit can still be made (see #3).
As you can see, there’s much more to pricing than simply picking a number and defending it against customer skepticism. Price is a package, containing your value, strategy, ideals and intentions. Pricing your services, and securing it consistently, is critical to achieving why you work, not just how you do it. So review and clarify your four factors, and get back to achieving your goals by winning on price every day.