Don't Provide Discount Yet, Do This Instead!
Estimated Reading Time: 6 Minutes
When a new client
mentions your product/service as expensive, don't rush to offer a 15% discount.
This could damage your brand and should be the last option
The term 'expensive'
is relative and only exists when comparing something or someone.
Potential customers compare businesses based on;
1. Affordability (their budget/pocket)
2. Competitors
3. Assumed value
4. Cost of their problem
1: AFFORDABILITY; THEIR BUDGET/POCKET
When people compare your product to their budget, it's important to explain that your product or service is a 100% guarantee. If their budget is below the price, you can offer a scaled-down version that matches their budget and provides up to 60% result. This way, they can still enjoy the desired results after purchasing and using the scaled-down product.
Playing this first card increases the value of the first product, as it becomes more attractive when out of reach. This can either make the product an aspirational one or prompt them to seek money and pay for it.
Example of this is iPhone, there are so many people you see with iPhone that there salary wasn't supposed to cater for it, Apple did not give discount just because they couldn't buy it, it instead became an aspiration product for some as they started saving towards it, or some went to look for the money anyhow and purchased it.
The only thing Apple could do was sell you an
older version of the phone at a lesser price but they will not give discount.
2: COMPETITORS
Think like your customer; If your product is similar to competitors, you need to provide a solid reason for your high price and why you would buy from yourself. If your product is different or not that obvious, you can educate and inform the prospective customers about your pricing. Without explaining your reasons, customers will find it hard to understand why they can't get it cheaper somewhere else.
Using petrol filling stations in Lagos, Nigeria as an example; Fuel stations all import the same fuel, but NNPC sells the cheapest. But it's surprising to know that some people don't always patronize NNPC because of several reasons like convenience, close distance, good fuel gauge, good litre etc. People don't always buy because of price, that's why you should know that people's price is the most visible information about a product, so it's important you clearly state it.
3: ASSUMED VALUE
“Is it not just plumbing?”,” Are you charging this high because of a simple makeup?”, “Is it not the same food you're selling?”.
People often base their assumptions on their past experiences, memories and beliefs, leading to questions about the quality of the products and the price.
If a person is assuming that your price is not supposed to be that high because of the value they assume you are giving, it is also an avenue to educate and enlighten them on why your price is justified.
“By using my product, you can actually lose 10kg within 7 days”
“With my service, your task for the month can be further simplified into two weeks”
When you explain what they stand to gain and the
value you are offering, they will realize that they are wrong about their
assumptions.
4: COST OF THEIR PROBLEM
The reason why these set of people see you as expensive is because compared to the problem they think they have and want to solve, your price is higher than it.
They can't seem to understand why they are having a challenge of #60,000 and your solution is #150,000.
The truth is many business owners underestimate the price of their problem. For example, a so called business owner that is running solo while getting the tasks for his business done may not really see the big deal with what he's doing and may term your solution as expensive but until you open his eyes and enlighten him how he's shooting himself in the leg, he won't understand that he is simply self employed and not running a business.
When you show him the disadvantages of what he's doing, e.g what if you break down today, can your business function without you? What if you need to expand, is that when you'll start looking for people etc.
It's until you show them how magnificent their problem is before they can truly see the value in the price of your products or services.
Do you want to have a valuable and fulfilling conversation that will make your potential customers understand what you do to the barest minimum, see you as an expert in your field and possibly patronize you again and again; or you are focused on no meaningful conversation that will only make them buy today without valuing what you are giving them and probably not come back again?
Then, the ball is in your court!
