Smart Pricing: How to sell against lower-priced competition
What are your products or services really worth? How much will customers pay? Where will your competitors respond?
The first step in effective pricing is to determine your competitive advantage and use it to effectively differentiate your product. Failing to do this, you will be seen as simply selling a commodity. The moment you are selling a commodity then price is always the primary issue on the minds of your prospects.
Pricing is the most powerful profit driver and the convincing element in product positioning. Unfortunately, pricing is very often the most neglected element of the marketing mix.
It is essential that you sell your product or service on the basis of a strong competitive advantage.
You could select quality as your competitive advantage.
Most sales reps will instinctively demand for lower price to be the competitive advantage. Low price is one way for you to compete. But, it’s probably the dumbest strategy to try and compete on for customers.
If you want to effectively position yourself as a professional salesperson then you must urgently learn two things:
1. The first is to compete on something other than low price.
2. The second is that the only aspect of virtually any product or service that is extremely important to every prospect is quality.
How important and sustainable, as a competitive advantage, is the quality of your product or service? It’s vitally important. In many instances, it is the most important reason your prospect buys.
How do you sell quality as a benefit? Selling quality is easy. But only if you truly possess quality and you know what it is.
The real truth is that virtually everybody does have some sort of quality. Unfortunately, not everyone knows what quality means, and consequently they have a tough time selling it. They assume that all clients and prospects know what quality is. They don’t!
Quality, like all benefits, must effectively be positioned in the eyes of your prospect and client. Do you clearly and constantly articulate and demonstrate the quality of your products or services in the eyes and minds of the potential buyer?
Quality means fully meeting the expectations of your prospects.
Smart salespeople who sell at premium prices know that they can use a high price to make a credibility statement about their product or service being better; that is, if it costs more, it probably is worth more.
Allow price to be your competitive advantage, a higher price can make a statement about quality and credibility.
Always remember that the bitterness of poor quality remains long after the sweetness of low price is forgotten.
Article by John Lloyd, Brandstorm