When coming to an agreement about the value of your product or service to a prospect, dropping price is a shortcut to building value; it in no way enhances the value of your proposition and in some cases can actually devalue your offer.
Try this exercise:
A client recently asked me to drop the price of my product $300. While I could agree to drop the price. I first asked myself those questions and rather than unnecessarily discounting the price, I took the time to offer more value and resolve the real issues for which the client originally sought us out.
We have all used price to close a deal, myself included. In most cases lowering price is not necessary. Does the customer require a 10 percent discount to afford or pay for your product? Does the discount make your product solve more problems? Consider the idea that if your client can afford 90 percent of the price, they can probably pay the other 10 percent. If that is not true, you have them on too much product to begin with. You are giving price away not because of price but because your buyer is not financially qualified for that offer.
Push Value Above Price
The Price Myth, as I wrote about in “Sell or Be Sold,” suggests that regardless of how much your buyer talks about price, no one actually makes decisions based on price. Buyers never offer an amount they think is more valuable than the product or service they are receiving. In fact it is completely the opposite. A patient that pays $14,000 for dental implants, $140,000 for a car, $1,400 for a purse or $14 million for a house, believes the service or product being negotiated is worth more than what they are paying for it.
When you realize that your buyer values their money less than they value what you offer you will be able to close at the higher price. To the degree you can make sense of the value proposition, demonstrating how your product solves more problems than the money it takes to purchase it, the less you will have to discount your price. This is the Value Price Proposition –when value exceeds price, the prospect will buy.
A price reduction may make your deal look better for the customer, but it is vital to understand that no one buys a price. Think in terms of a see-saw with price on one side and value on the other. Value on one side, is really how your offer solves their problem and price on the other side is what they have to pay for your product.
Instead of lowering price as a way to raise value think about other ways to increase the value, so that your buyer wants your product more than they want their money.
Make a list of ways you can increase value and make your offer more valuable than their money and you will close the deal. There are always customers who will only buy when they get the lower price. But even those customers, when completely sold on you and your product, will be influenced when value exceeds price.
Grant Cardone is a sales coach, motivational speaker and author. His new book is “Sell Or Be Sold: How to Get Your Way In Business and In Life.” His website is GrantCardone.com.