Overcoming Price Objections

Competing on price is a race to the bottom–a game you don’t want to play. 

Charging higher prices ensures you:

• Don’t have to compromise on quality
• Give your customers a great experience
• Enjoy your work
• Only hire the best
• Stay in business

Here are three tips to help you charge the prices you want. 

1. Positioning

WalMart positions itself as the lowest price option, but you have to be a massive company to make this work.

Small businesses usually can’t compete on price, you have to find another way. 

Instead, compete on value and customer experience. Providing a great product or service AND an exceptional customer experience allows you to charge a premium.

“A good customer experience means your customers will spend more. In fact, 86% of buyers are willing to pay more for a great customer experience. The more expensive the item, the more they are willing to pay, according to research from PWC.” [source]

I saw this play out recently in a local Facebook group. I went in to search for recommendations on a company to replace the gutters on my home. One post had several comments recommending a gutter company that “charges slightly more” but is totally worth it for the great service.  

2. Get confident with your pricing

Unconfident in our tree pruning skills, we contacted two “professional” companies for quotes.

One person hummed and hawed when asked for a price. When he finally came up with a number, it was as if he pulled it out of thin air. Like he was asking himself, “based on what I know about her now, what can she pay?”

The second person came up with a price right away. This conveyed confidence and made me believe that they could deliver the service… and I didn’t wonder if the neighbour down the street was getting it for half the price.

When you know your numbers, you have a process for determining the price. You feel more confident and come across better in sales calls. 

When you know your numbers, your expenses don’t get out of control. This helps keep your pricing competitive while keeping your margins profitable. 

3. Talk to the right people

Identify the right people for your service at your desired price point. 

Ever wonder why Canadian Tire doesn’t carry Gucci bags?

No?

Us neither. It’s a silly example, but matching up your services and prices to the right people is a simple but often overlooked part of marketing and selling. Creating strong customer personas will help you market and sell to people who are the right fit for you.

Don’t try and convince the wrong people, they will never get it.  If you are talking to the right people, your pricing will be a non-issue.

Focusing in the value you bring, learning to price your products and services appropriately, and marketing your business to the right people will ensure you build a successful and profitable business for the long term.