How to win competition without lowering the prices
I’ve never been a big fan of discounts and or promotions that involve pricing. Once you start playing with the price of a product or service, creating coupons, or running pricing promotions, it becomes a never ending process. Your clients will begin to wait for those promotions or lower rates to book you or purchase your photos. After all, you’ve set their expectations for it.
This post outlines reasons other than pricing for lower-than-expected sales. It also provides three tips for beating the competition that doesn’t include resorting to lowering prices, giving discounts, or holding pricing promotions.
Price is just one piece of the purchase puzzle
Have you ever stopped to consider why people aren’t buying your product or service? Many people in sales think that price plays a significant role in the consumer decision-making process. That’s true to an extent, but it depends on many other factors. Possible reasons people may not be purchasing your product include:
- You don’t sell. Literally. People don’t know that you sell this product. You never told them. You never marketed your product. The solution is easy—tell them about it.
- People think your solution cannot meet their specific needs. Everyone believes they have unique needs, and doubts that any solution can meet those needs. Overcome this barrier to purchasing by showing prospects how your product can make their life easier, make them feel better, solve their unique problem, or meet their unique need.
- They don’t understand your product’s benefits. People don’t buy a product simply because it’s cheap, though that doesn’t mean price doesn’t enter into the decision-making equation. People buy a product because they see that it will benefit them. Clearly explain your product’s benefits.
- You are not pushy. If all you do is email prospects or send an update once a month via social media, count on low sales. It’s okay to be pushy, and to pitch hard and sell hard. The trick is not to be pushy all the time, just at the right time.
What people really buy
People don’t buy products. They buy better versions of themselves. This post explains how Steve Jobs tapped into this marketing truism when developing his approach to selling the iPod. The approach led to incredible sales of the iPod in spite of the fact that Apple launched it in a market already filled with MP3 players.
So now know that people don’t buy a product because it’s inexpensive. They buy because you sell them the product at the right time, they see the benefits of the product, and have a clear picture of how this product will make their life easier and better. Consider, as Steve Jobs did, how you can convince people that your product makes them a better version of themselves.
How you beat the competition
Although you know why people buy products, you may still be unclear about how to beat the competition. The following pieces of advice can give you that competitive edge:
Start selling your product. You have a bunch of social media followers and friends. Some of you have an email list of prospects. Find new opportunities on LinkedIn, Facebook and in other social and business networks. Pull together a list of small businesses you are targeting, and start talking to them. Show them how your product is different and better, how it will meet their needs, and explain its benefits. And of course, don’t do this one time per client. On average, it takes seven contacts with a prospect before they convert—for some clients it takes 20 contacts. Don’t be shy about selling.
Provide value first. This is one of the most important tactics for a successful sale. As this earlier post (link to earlier post) explains—provide value before you ask for something. Give, give, give, and then get. This affords you the biggest opportunity to convert every client. When you’ve given so much, it’s a natural human tendency to feel obligated to give back.
Don’t lower prices. Paradoxically, sometimes lowering your prices can kill sales, while raising prices can increase them. If you want to play with your pricings, go in the opposite direction of what seems sensible—increase your prices. When increasing prices though, be sure that the value of the product always exceeds the price. For example, if you have a wedding package that costs $3,000, and also you have add-ons, like 24” by 36” prints on canvas for $200 (with a 250 percent margin), consider including the cost of the prints into the price of the package or increase a package price to $3,500 and offer all prints at cost, forgoing your profit margin.
Do you have tips for selling that don’t involve playing with prices? What are your experiences with trying out these tactics for beating the competition? Please share your thoughts in the comments below—I’d love to hear about them.
Categories: Business tips