Simple Formula for Defending Price
The starting point to achieving higher prices and defending price is always value. You must have a good product or service. If you have a crappy product or service, pricing is not your problem. Fix your quality first. But if you have a compelling, high-value offering, how do you defend pricing against a barrage of price objections from customers? How do you hold the line in the face of constant feedback from customers that our prices are too high? (First of all, remember that customer feedback is polluted with self-interest, and let us not mistake it for market intel.) The answer is simple equation:
MESSAGE: What is your message? What is your message for why your offering is worth a price premium? What is your message when you get price objections? What is your message when you get price match requests? What is your message when customers ask for a discount? What is your message when customers say you’re outside their budget? Make a list of every single question, objection, and scenario you can think of related to price that the customer could lob at you, and prepare the best value-based answer you can for it. The right time to prepare these answers is not the second a customer throws it at you. Be ready. And tailor the messages. Not every customer (or customer type) has the same price objections, and the same response will not be effective against every customer.
PREPARATION: Once you’ve built your library of messages, PRACTICE THEM. This is where the most abhorred activity on the planet comes in: role playing. Yuck. But seriously. You have to be ready to deliver the message in a voice that is natural, not robotic or scripty. This isn’t about memorizing your messaging. It’s about internalizing it. It’s about ensuring you know how to handle the objections and questions that come your way with fluency and ease. Practice with other sales people in your organization. Practice on your dog. Whatever, just find your voice and make sure you’ve said the messages OUT LOUD enough times until you feel comfortable, calm, and clear in delivering your message in response.
Having a solid message built on the value of your offering, well-practiced and prepared, naturally leads to CONFIDENCE in the sales and pricing process. It will allow you to hold the line on pricing, avoid unnecessary discounts, and (ahem!) earn more money. An enormous part of successful pricing performance is confidence. And the keys to confidence are messaging and preparation. Put some elbow grease into developing answers to price objections. Practice until you deliver them with fluency and confidence. It’s a simple formula. But it’s true.
And remember, this is all underpinned by solid VALUE. Good products and services are the motor for pricing power.