How To Get Your Price
by Tom Egelhoff
I rarely present a business seminar or workshop that the subject of price doesn't come up at least once.
Overcoming the price objection has been the nemesis of salespeople for centuries.
For some reason when the customer says, "Your prices are just too high!" their feet turn to clay and they walk away in defeat.
Or, they reach in their "bag of tricks" and pull out some sales gimmick they read somewhere.
You can get your price and still send your customer on their way with a smile of satisfaction ... here's how to do it.
How Price Works
First you have to understand how the concept of price works. It's the "fair" exchange of money for goods and services.
"Fair" being the optimum word here. Customers expect you to make a fair profit on your goods and services. Here's how price actually works.
I have a Cross® brand ink pen. It retails for about $30.00 at fine stationary stores.
Mine is used so how much is it worth? Some people might say half price.
But, it doesn't work, now how much is it worth? Most people would say zero; who wants to pay for a pen that doesn't work?
Suppose I told you the reason it doesn't work is, instead of an ink cartridge inside, there is an ounce of solid gold. Now how much is it worth?
The point of this exercise is that every time I gave you information about the pen your perception of the price changed.
And that's what price is — information that causes the customer to determine value.
Information creates value; and you must give the customer the correct information that determines the value to them.
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Customers Buy Benefits — Not Features
I know you've all heard of features and benefits.
Features are what a product has; a car has four doors.
Benefits are what a product does; four doors give easier access to the car for grandma, the dog, or the kids.
The benefit isn't four doors its convenience. Match the benefits of your product or service to the needs of the customer and you should have a sale regardless of the price.
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Learn How To Describe Your Product's Price
Next we have product descriptions. This is more information for the customer.
If I go to the car wash and pick the "economy wash" over the "deluxe wash" I'm cheap. I'm settling for less than the best product offered.
But if I go to the grocery store and buy the economy size box of Tide® I'm frugal and a good shopper.
So how do the descriptions of your products or services make your customers feel?
I took a trip to my local Alberston's to do a little price shopping. One hundred Bayer® aspirin tablets retails for $7.99. But, add calcium and change the name to Bayer for Women® and 75 tablets jump to $8.99. But that's not all.
According to the box, sixty-five tablets is crossed out and changed to seventy-five and the customer gets almost 15% more product free.
By making the product specific to a group and adding a little extra Bayer increased the perception of value to women customers.
They further increased the value by giving ten tablets free. Can women take regular Bayer and a calcium supplement and save money?
Perhaps, but when you're there, and the product is there, it fills the customers need and a sale is born.
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How To Position Your Product Based On Price
Now, let's talk about positioning of your products or services.
Let's stay with pain relievers since they are familiar to most of us. If all pain relievers were lined up on store shelves which one would you pick?
The challenge of the pain reliever industry is to show you a benefit of their products over the others.
How do they do that? By creating a perception in your mind that one product is better than the others for your specific need.
- Excedrin® is the "headache" medicine.
- Bayer® helps protect against "second heart attacks."
- Tylenol® is "aspirin free" and works for "aches and pains."
- Aleve® works twelve hours with two tablets "all day strong."
To sum up, price is a perception in the customers mind of what a product or service should cost that will fill their needs.
If the need is filled at a perceived "fair" price by the customer the sale is made.
What makes the price "fair?" The perception of the product formed by the education of the customer by the supplier.
Education about the product creates value and justifies the price.
When you think about your next ad, think about the content. Are you educating your customer?
Are you creating value? Are you positioning your product away from your competitor and making it more valuable than theirs?
Create value in the customers mind and you'll always get your price.
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© Eagle Marketing PO Box 271, Bozeman, MT 59771-0271
http://www.smalltownmarketing.com - (406) 585-0219
Based in Bozeman, MT, Tom Egelhoff is the author of How To Market, Advertise & Promote Your Business Or Service In A Small Town, and The Small Town Advertising Handbook: How To Say More And Spend Less. He is also a seminar and workshop presenter and trainer. He may be reached at 406-585-0219 or PO Box 271, Bozeman, MT 59771-0271
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