Lately a lot of my clients and colleagues have been talking about pricing. How much should I charge? Am I charging too much? Am I charging too little? This can be a nagging question for Entrepreneurs and Sales Professionals alike. It certainly has been an area that I have struggled with over the years as well. But it doesn’t have to be.
I heard a recent statistic that 20% of our clients will only purchase our most expensive package. And if you own your own company, you might not have even created that product or service yet.
When I heard that statistic, I was shocked. Really? 20% of my clients want a high-end package? After hearing that, my creative mind went crazy and I created a new (high-end) program for clients who want it. And I cannot wait to begin offering it! (I’m selling it for the first time in a couple of weeks, so it will be fun to test the 20% theory!)
A lot of time can be wasted thinking about how much to charge, when to discount, etc.
However, the more confident you are about your pricing, the easier it will be to sell.
I am going to share three mistakes that entrepreneurs and sales professionals make when it comes to pricing and what you can do to change it. Hopefully the ideas presented will allow your sales conversations to flow more freely and make it easier to ask your clients to pay full price.
- Mistake #1: Discounting: I was recently talking with one of the MasterMind groups that I participate in and one of the members was trying to decide which company she should choose for a particular service. She was comparing four companies. Three of them were the same price and one of them as 1% lower. After discussing it with the group, she immediately discarded the company that had the lowest price because she figured they weren’t as good as the other three! Your prospects will judge you (often negatively) if you are the lowest price!
- Change it: If someone is asking you to discount your products and services, let them know they can receive a lower price, but it will be in the form of a lesser package. by having two or three packages, and starting with the most costly package first, you can always work your way backwards to a smaller package rather than discounting.
- Mistake #2: Only Having One Solution: One of my clients recently shared with me that they weren’t closing as many sales as they would like to. As we walked through their sales process, it became clear that when they came to the end of their sales conversation, they only had one package to offer. Instead of having options, the prospect would just say, “No” and that was the end of the conversation. I worked with my clients and helped them develop three strong packages that they could offer. By having options, they were able to offer real solutions to their clients and close more sales!
- Change it: As I mentioned in the example above, when you are meeting with a client it’s best to give them two or three packages to chose from. That way you can also customize a package for them if they need it. If they are still asking for a lower price (even after you’ve offered a smaller package), you can still give them a payment plan without lowering the price. That way, you still retain the value of what you are offering.
- Mistake #3: Lack of Confidence: The biggest challenge that entrepreneurs and sales professionals have regarding closing sales is their lack of confidence. Let’s be clear, confidence sells! Think back to the last high-ticket item you purchased. did the sales person who sold it to you have confidence? If they would have been meek about their approach, do you think you would have still made the purchase? Sometimes a service or product’s brand is so strong that it sells itself, but if it’s not and the salesperson isn’t confident, most people won’t buy. We want to be convinced!
- Change it: Believing in yourself and your products and services is key to getting the sale. If you need help in this area, connect with a coach or mentor who can help you release your limiting beliefs about yourself that are preventing you from being the strong, confident person you were born to be!
Action Item: Follow through on the strategies above and commit to evaluating your pricing successes and challenges at least once per quarter!
One of my favorite quotes is by an unknown author, “To my customer: I may not have the answer, but I’ll find it. I may not have the time, but I’ll make it. I may not be the biggest, but I’ll be the most committed to your success.” Your clients want YOU to be the solution and they don’t want to have to shop around. Believe in yourself and your product so that they don’t have to look for someone else!