Should I cut prices? Perhaps offer discount coupons? Charge less but give less value? Stick to my guns and stay at the same price point, focusing more on communicating the value I offer? Or, charge even more and find ways to increase an already-exceptional buying experience?
Indeed, an ongoing theme in this blog and in many others is the issue of Price vs. Value.
Many of us do our best to persuade our readers that rather than submit to price-cutting pressure from prospects and a general price-lowering trend as a result of the economic climate of the past few years, that you instead increase the value (both real and understood) of your offering.
In other words, sell on value; not on price.
This is one reason why referrals, introductions and word-of-mouth are so important. Because you meet new prospects as a result of borrowed influence; that of someone they know, like and trust, you are viewed in a different, more positive and — dare I say — value-based light.
One helpful saying I either heard or read many years ago rings very true to me, and that is, “A person will exchange their money for that which they feel is of equal or greater value than the money they are exchanging it for.” Naturally, the more value they perceive compared to the money they are paying, the more likely they are to make that exchange.
There are several other sayings I love regarding the trumping of value over price. Famed consultant Alan Weiss, author of Million-Dollar Consulting says, “Money is never a resource issue…it is always a priority issue.”
Tele-Selling authority, Art Sobczak, author of SMART CALLING sites one of his early mentors who told him, “There are no price objections; only value questions.”
Zig Ziglar’s awesome vignette regarding Price versus Cost has proven so valuable to me throughout the years that I often repeat it from stage…in Zig’s voice. 🙂
Two more of my favorite sayings in this regards are from John Ruskin (1819-1900). You can read them here and print them out if you’d like.
And, with all that said, there are exceptions. Sometimes price is indeed the true issue, and the sale is unlikely to happen regardless of the value compared to the price. However, in these instances, it’s not an objection; it’s something else.
Exactly what is it? We’ll look at that next.
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This article, and particularly your delightfully-told story of Zig Ziglar’s “price vs. cost” just might have changed my life. I’m new to the world of business. For my entire working life I have been either in performing (singer/actress) or teaching (school and private music lessons). Now in my sixth decade, I’ve taken everything I’ve learned and mastered from both fields and created a training program to help people speak effectively in public, both one-on-one and before large audiences. I’m absolutely confident of the exceptional value of what I provide.
Since I’m not giving workshops in big centres (yet!) I have been charging a considerably lower fee than trainers would charge in, say, Toronto. A friend told me to raise my price and two companies paid it without batting an eyelid. Even at that, I have felt embarrassed about it. After your story, I feel totally changed! “Are we talking about a one-time price to learn skills that will benefit you for the rest of your career and private life, or the cost of not knowing how to speak and present yourself effectively?” Wow! Thanks!
LOL! Because it’s 39 like Jack Benny’s 39! But YOU’RE probably too young to remember Jack Benny!
I always say, “Competing on price alone is a race to the bottom, and it’s a race that nobody wins”.
For some people though, price is their only consideration. That’s a sad thing because most times, you do get what you pay for.
Hi Chris, I certainly agree with you…on both points. Thank you for sharing!
That comparison of Price vs. Cost was so simple it went over my head a few times. I had to listen to the video at least 3 times. Every once in a while I bump into a phrase which serves as a foundation of helping me succeed professionally and on a personal side.
I think the video provided one of those phrases which will help me educated my clients on my pricing structure.
Thanks for sharing.
Raul, what a great compliment. Thank you so much!! And, I’m glad you enjoyed the video, as well.
Great post, Bob! Thanks for the quotes, authors and books as well! Total big fan of Mr. Ziglar and Dr. Weiss. I am sure that professionals/business owners do not want to get into a “wrestling match” over price vs. value LOL One of the things which helps me “pin down” this obstacle is to write up an outline emphasizing value first to the client. Once the client gets the value benefit, the price point is easy. Their response determines the level of their commitment. Once again, keep up the super work!
A timeless topic Bob…great job!
We offer a 10% discount when a family or business buys multiple services or is a fellow Association member (Various Chambers, Networking Groups…) but that is it. Competing on price is a quick road to the bottom.
I can tell you this – We have also raised prices 3 times in the past 18 months and sales continue to go up exponentially in #/$. As a thank you and value-add we have raised guarantees and our referral thank you each time as well.
Thanks for reminding us of this important element to our businesses!
Awesome, Chi Chi. It’s a great idea to “build the value” first *before price” is brought up. That way, they understand that value, have focused on it, and then will see the price for what it is. Thank you for sharing!
Rich, thank you. And, there is certainly nothing wrong with discounts in certain environments such as those you mentioned, and in other instances. The key is that you are using the discount from a position of strength and not out of weakness! You are using it on your terms as opposed to feeling it’s the only way you can make the sale. And, I love that you’ve been able to raise prices. We have, as well, and so have many others I know. Good for you! And, thank you for sharing with us!
WOWEE WOW – I love it!! Thank you for sharing that with us, Heather! (By the way, how could someone just 39 be in their sixth decade?? 😉
Hi Heather, I don’t know…you mean like, “Say Good Night, Gracie?” 😉
Bob, Very Good Perspective. Quick Question, based on my personal experience recently, How do we compete in a market place where a New Store Owner(who is a wholesaler has opened up near us) near our Grocery Store is selling a Product for X-Y dollars, where the Average price across all other Stores is X dollars. We are definitely consistently Nicer to our customers than them, We maintain Quality products etc., but kinda worried that we might loose our customers to the price. Appreciate your response.
Hi Suresh, thank you for your question and your kind words. If you are talking about a product that is absolutely the same (in other words, it is basically a commodity) then low price is the natural, decision-making fallback position for the customer. Because of this, you’ve got to find a way to differentiate yourself and your store from the new store. It also sounds like they are larger in size, which intrinsically provides you with an advantage; typically the smaller store, especially if independently owned, can act faster and quicker in terms of implementing new ideas (i.e., find value-based ways to add to the overall customer buying experience). So, the question becomes, what can you do to get more people into your store and enjoy the buying experience so much that their mind is not on price but on buying from those they really know, like and trust. Remember, if they are “already” in your store for other items, then taking the time to go to the new store is time out of their day. How can you make your store a one-stop buying experience that provides more convenience for your customers? These are just thoughts, of course. Since I don’t know your exact situation I’m certainly not qualified to provide specific ideas. But, hopefully, this will get you started. Thanks again!
Hi Bob! I just finished a price point meeting for infoproducts I’ll release soon and this was the discussion…so timely, thank you!
I spoke so confidently – holding my ground on value, and then walked out knees buckling with concern, hehee! It’s like you were listening in and now responding. 🙂
I always enjoy your posts Bob. Thanks for sharing!
I love it, Zara. Thank you for sharing that. Let us know how things go!
Bob – Thank You very Much for that Thoughtful and Sincere Comment. Me and my Wife are seriously thinking about some Value based Ideas after reading your Comment. I Love your Go-Giver and the Go-Giver Sell More Books. Gifted to many of my Friends in Sales. You walk the Talk Bob.
That Video of your Impression of Zig was Excellent, “When you are Saying the Price is too high, Are you talking about the Price or the Cost…” ..you have some other Skills too…Mimicking Zig. Nice….
I Wish you all the Best Wishes in your Life and all your Ambitions Bob.
Thanks and Regards
Great article Bob! I just pray you never leave me a voice mail in “Dad’s” voice, otherwise I might just get really confused!
Tom, that is TOO FUNNY! Thank you, my great friend and brother! I appreciate all that you and your amazing Family have done and continue to do for so many of us.
Wow, thank you, Suresh. Your very kind comments mean a LOT to me. Please know that, my friend. I wish you all the best, as well!!
very good indeed!!!