By Tyler Mann
In sales today, we believe that everything is about the price. We will strive very hard to sell our product or service at a price that gets the customer. But what is this doing to the perception of our offering?
Research has shown that people are willing to pay more if they perceive more value. PWC found “Consumers will pay up to 16% more for a better customer experience”.
Sustainability is another big reason why consumers will pay more, an increasing trend.
Finally, people will be more likely to buy if they are confident in the quality of the goods or services, especially when told by other consumers.
What happens if we keep cutting prices on our products and services? Let me tell you about my experience.
We bought our new house and decided after a while to look into replacing our sliding glass door. A salesperson happened to come to the door to discuss his window and doors. We decided to entertain the idea as we had been considering it. He shows us his options and prices etc. It was a pretty large chunk of change, but we were considering it. We like to compare options for price vs quality, examine our budget, and asked him to give us a few days. He drops the price. We then tell him we don’t want to decide today but would like to consider it. He then says “for this day only, to get you to sign today, what price would you need?”
Now there is a lot we could discuss in this story. There is persistence to close the sale, the fact that most people who don’t close the same day forget about it and back out, or the other detail that he fake called his boss to get approval (we could hear the voicemail click in but he acted like he was getting real responses).
So while there is a lot to unpack in this, one thing stood out to my wife and I. We started asking ourselves – how much is this door worth? If you can keep lowering the price, then I just get the sense that you don’t know what your door is worth.
Now I won’t claim to be something I’m not. I don’t have 20 years of sales experience. But what I do have is common sense, understanding of human psychology, and experience as selling my company’s professional services. In most cases when I lead sales of our services, I don’t cut the price. We have an incredible team, with a very large number of years experience in our field, and deliver a quality that most other firms can’t do. I believe our services are worth what we charge. And you know what? Others agree! Many companies have found great value in what we offer and recognize that the lower-cost options aren’t worth their price!
I am not saying you should never lower your price or make a deal. Depending on the goods or services, it may make sense and be necessary. However, too many companies jump to cutting the price too soon in negotiations, which devalues their offering and just brings all sorts of pieces into question. Instead, we should find the right market price for what we offer, and find customers who believe in our value.
What do you think? Should companies jump to giving you the discount? How does it make you feel if you keep hearing lower and lower prices?