Don't Compete On Price
Competing on price is quite simply a poor business strategy. Unless you're the gorilla in the marketplace, you'll never be the cheapest option customers have. Aside from the fact that competing on price is a profit killer, it also damages your marketing position. The first thing to look at when you're competing on price isn't how much lower you can go, but it is your sales process and branding strategy.
The truth is people rarely make buying decisions because of price. Of course there are some exceptions to this. For instance, you won’t be able to sell a new corvette to someone that only has an auto budget of $150 per month.
However, when you hear that the objection is price, what the prospect is really saying is, “I can’t justify spending that amount, because I don’t see the value.”
This is good news! Because you know that your prospect is interested. It means you have something they want.
When a prospect says they are interested, but not for that price, chances are they will look for a better deal. They want what you’re selling, and the only difference they see between you and the competition is the price.
This is where you need to take a step back to look at your sales process and identify how to differentiate your business from your competition and show the value of what your business does.
- Why is what you are selling important to the prospect?
- Think about what features and benefits you are promoting. Are those the ones that really make a difference to the prospect?
- Think about how you compare to the competition. Have you highlighted what makes you different? And is it important to the prospect?
In The Value Builder System™, what we've just described is called Monopoly Control. A business creates a Monopoly Control when prospects see a difference between what you sell and what the competition sells and the difference is important to them. The beauty is that when you achieve Monopoly Control and have differentiated your business from the competition, then you get to set the pricing.
Remember, if prospects are objecting to price they already want what you're selling. What they haven’t agreed to is the value of what you are offering. To close the deal, focus on the value from their point of view and the price won't matter.