Does Your Pricing Strategy Suck?

by Riaz Sidi | Follow Him on Twitter Here

Give them value and they will buy.

But what happens when you leave money on the table?

Or when you pitch too high and they decline altogether?

It can be a struggle to determine how to price your solutions.

You have made that connection, finished the needs assessment, and now it is time to determine what you can really provide to your client.

There are many variables to consider:

  • When did their eyes light up? And what were you talking about at that time?
  • Is there a clear indication that they want to do business with you?
  • Did they tell you what they are willing to spend?
  • Do you have a clear indication of their budget?
  • What do they consider value?
  • Have you truly identified their needs?
  • Do you really have what they need?

These questions are important to consider during that initial meeting so you can go back to them with a stellar proposal that will be customized to their needs.

But what is the sticker price of your solution?

There are two paths sales reps. typically take to go into an offer meeting:

1) One pricing option

2) Multiple pricing options

There are varying opinions on both.

With one option you are giving the perception that you know your stuff and that you truly are an expert.

This is the price because my services are exclusive, will work for you and your business, and are worth the quality, time and effort.

That is a fair statement.

But say you put that one option at $10,000 when you could have pitched $50,000?

How would you ever know it?

Typically you will have a ball park figure going into the offer and you will have incorporated that into your offering.

But conditions can change.

So unless they tell you straight up that they want to spend exactly $25,000 how will you ever really know if you are low or high-balling it?

With multiple options you are providing various prices so that regardless of their budget they will choose one.

The varying amounts will also give them with a realistic impression of what they can afford.

If they go for the highest package they are clearly looking for quality.

If they go with the middle package they want value.

And if they go with the lowest package they want to try out your products or services to see if it works.

Some of my colleagues call it the Goldilocks and the 3 Bears strategy.

Too hot, too cold, just right.

Except the customer will determine how hot they want their porridge.

Derek Halpern who runs the blog socialtriggers.com has a great strategy that advocates multiple pricing options works best.

Derek’s take on pricing strategy definitely has had an effect on me.

Although, I have been of the mindset that one price conveys expertise I am going to give Derek’s method a try and I will let you know how it goes.

How do you price your products or services?

Which strategy works best for you?

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