In a previous blog post I told you that competing on price is a dangerous game? That following your competitors and dropping your prices to match theirs is a bad idea?
Now I’m going to explain just why that is.
Unless you live in a cave somewhere, you’ll be aware that every now and then the papers go on about price wars. Particularly when it comes to petrol.
One store lowers its prices, then everyone else does too. This is a price war.
But the only outcome is a Pyrrhic victory – there are only losers in price wars.
Like you, most other people look for three things when they’re buying something: the finest quality, the best service, and the lowest price.
But nobody will ever find those three things in the same place. I haven’t yet, and I’m as keen on a bargain as the next man.
I can’t provide the finest quality, the best service, AND the lowest price. Nor can you. What’s more, I don’t want to.
I’ve built my business on providing the finest quality (measurably great results) and the best service (I’m quick, charming and helpful, everyone says so). But you can be damn sure I’m not the cheapest. You definitely get what you pay for in this industry.
So let me ask you: do you want to be known for your great products and brilliant service, or because you’re the cheapest in town?
Those who sell themselves cheap do nobody any favours. They miss out on a good income. Their customers miss out on a great product and the service they deserve.
I’ve noticed something else about price, too. Something from my own experience and from looking at various of my clients over the years.
A client who pays a higher fee is more likely to take the advice they’re given.
In my earliest days as a copywriter, when I was concerned about keeping clients at any cost, I found it almost impossible to get clients to really listen to me. You see, they thought they were the experts. So they price shopped, then wouldn’t listen to my advice.
Nowadays, my services don’t come cheap – but they’re a damn good investment. My clients listen to me because they know I can help them. But also because they’re paying a premium for my services, so they’re more likely to take my advice and comply with instructions.
So what do you do when somebody questions your price? Tells you that it’s too high and they can get it cheaper down the road?
Honestly? The best thing you can do – the thing I always do – is say: “So?”
This has two benefits: first, it acknowledges that you’re more expensive and firmly places you where you want to be. You’re not justifying, explaining or apologising.
Second, you put the ball back in his court. Now, the prospect has to either accept the price or refuse and walk away.
And if he walks away, you were never going to make the sale at a decent price anyway. Remember: if he really could get the same thing cheaper down the road, that’s where he’d be. Not with you, arguing about the price.
Then, he might ask: “Well why should I pay that much?”
Which is a brilliant question, and if you get it you should do the Snoopy dance in your head. Because how often do you get the chance to explain why you’re better to someone who genuinely wants to know? Someone who has actually asked you?
Now you can say: “Well, I’m glad you asked because here’s why I’m better than anyone else.” And position yourself as the only logical choice.
Vicky Fraser is a copywriter, author, and entrepreneur. She really did run away with the circus… but when she’s not swinging from a trapeze, she’s showing other copywriters and small business owners how to work with better clients, make more money, and stop missing bathtimes, first words, and dinners with angry partners. In fact, she wrote the book on it. Get your copy here.