Price is always a very sensitive issue, especially during times of contraction, when money is tight, consumers are scared and more selective with their money. The first response (incorrectly) is to reduce price in order to make up for less volume. It is a myth that a lower price will sell your product and a formula for disaster.
Unless you are Wal-Mart or the Dollar Store that have entire business models built around very small margins and high volumes, the lowest price model will fail the individual and the company. Selling price is an indication of a weak-minded and poorly trained individual or organization that looks for squirrel-like solutions to their challenges. I can show you an almost endless list of companies that have used the lowest price model that have closed their doors this year alone!
Do the math yourself if you reduce price 50% you would have to sell twice as much product to be even, which during a period of economic contraction replacing loss volume would be more difficult than just learning the skill of holding price. This applies to selling on the net or traditionally sales that take place on the showroom floor.
A lower price will NOT solve your problems and is actually more likely to reduce the perceived value of your proposition.
The public is being conditioned that things are tight and they will be more selective with their purchases. That means they will not just be shopping you against similar products but also unlike products. “Do we buy a car or redo the kitchen?” In this case lowering your price will have nothing to do with their decision and only building value will.
RULE- MONEY MOVES TO VALUE NEVER THE LOWEST PRICE!
If not completely sold on the value proposition of your product or service, the prospect will elect do something else with his/her money! (By the way, doing nothing is something else.) If you don’t know that the lower price/lower volume formula is a recipe for disaster you and your people will believe it (incorrectly) to be an option. Also, during periods of contraction experience is worthless and skills are everything! Most of your people have never sold in this environment. The ability to justify the price by building value, selling yourself, your company and creating a true value proposition is more valuable than experience.
Get yourself and your staff thoroughly handled on the fact that lower price and lower volumes is a formula for disaster. Check out my book and audio program Sell to Survive
, where there is an entire chapter dedicated to this topic of the price myth and how it is a destructive. It cost less money to train people than it cost to give your product away especially since lowering price doesn’t guarantee a sale and won’t make up for the reduction in volume.
Grant Cardone, Author and International Sales Expert
Go to www.selltosurvive.com
or you can call 800-368-5771.