Since the first Neanderthal was going cave-to-cave with his “luxury animal skins,” selling on price (that is, lowering the price when the buyer objects to the cost) has been a standard M.O. for the vast majority of “untrained” sales people.
And, to be fair, there is an understandable logic to doing it… often, it will win you the sale. But doing that also brings with it a number of problems… and why you should never sell on price:
- It trains your clients. They learn – for future projects with you – that when they ask you to lower the price, you will. That is not a behavior you want to encourage.
- If they’ve been a client for a long while, and you give in to a lower price for the first time… they’ll start to wonder if you’ve been overcharging them over the years on all of their past projects. Not a feeling you want them to have.
- It can hurt your brand. If you give into price – fairly often and for multiple clients – word will get out about that. And pretty soon, you’ll become recognized as the “low-cost provider.” I can’t think of a single agency who would want that as their reputation.
- The first rule of capitalism is… businesses exist to make money. And if you’re giving away revenue just to make the sale, you’re impacting your firm’s margin and its long-term health.
- Finally, and maybe most importantly, if they buy from you on price… they will leave you on price. Guaranteed! Their relationship with you is not based the quality of your work or the experience of your team or your vertical industry expertise… it’s about price. And if another supplier comes along for a nickel less… they’re gone!
Again, I understand the attraction to giving in to a buyer’s price objection… it helps you make a sale and it helps you hit your sales goals. But it’s a slippery slope… and the long-term consequences can be painful.
Try this instead…
Like you, I also get asked to lower my price and here’s how I respond [every time]. I will say something like, “Sure, I’ll lower my price by 30%… but I’ll also lower my work and my deliverables by 30%.” And every time I do that, the response from the buyers is always the same, “No… I don’t want that. I was just trying to get the price down. Let’s move ahead as we discussed…”
Bottom Line
Selling is hard work. So, you want to take advantage of any chance you get to make a sale. But caving in to a price objection should not be one of them. If you’ve priced your services fairly for what you’d be delivering, then stand firm. Don’t ever feel guilty about the price. If the buyer wants to pay less, but isn’t willing to work with you on an alternative solution… it might be time to walk away.
Good luck and good selling
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