Are You Just an Order Taker?
In speaking with one of my executive mentoring clients the other day, we got into an interesting discussion on pricing and sales. My client had been asked to discount her highest program and brought this request to the call, wanting to get some coaching around this issue. What followed was a powerful discussion of pricing and positioning. I wanted to share some of these thoughts with you.
From my perspective, if you are competing on pricing, you’re basically an order taker- not a sales person. True selling is the art of demonstrating value, and selling that value. It is not about offering 50% discounts to get people to purchase. This, especially, doesn’t work when you are asking people to invest in personal development or business growth services. If you discount your services, you are sending a message that your services aren’t that valuable.
For many reasons, I don’t suggest that you do this. If you have followed my recommendations for properly positioning yourself in the market, analyzing your system, and seeking feedback, you should be confident that your system and pricing is in line with the value you provide.
When you “give in” on price, you are, in essence, saying that your value isn’t high enough. Remember, your business is not a commodity, and your expertise is not a commodity. It’s not the same as selling socks or milk.
I suggested to my client, and I suggest to you too: never compete on price. You don’t want to work with people who undervalue you from the beginning.
What do you think?
Create More Value, Make More Money
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July 6th, 2009 at 7:08 pm
Wow Glenn –
Great topic and a timely one for me.
Was just talking to a new friend about how I have (in the past) been extremely guilty of undervaluing my services … and mostly (I think) because I don’t really understand what the value really is in them and how to express that to others up front.
Better go read some more of your blog I’m thinkin’
Good stuff!
Andrea
July 7th, 2009 at 3:13 pm
Andrea,
Thank you for taking the time to comment. I’m glad this post was timely. And yes, please do read more of the blog.
Glenn
July 8th, 2009 at 2:37 am
Glenn,
I agree with you. Pricing should be tied directly to the value provided.
Establishing value is a tried-and-true technique used in direct response copywriting. For anyone who does not understand the concept, learning this copywriting technique would be a good place to start.
Alex
July 8th, 2009 at 5:50 pm
Alex,
I definitely agree with you. Thanks for your insightful contribution.
Glenn
July 13th, 2009 at 6:23 pm
Andrea:
If you compete on price you are telling others that they can get what you really do in a book, a CD or DVD…ie you are a commodity.
The last time I checked, commodities are sold in huge warehouses called Home Depot, Walmart, McDonalds…
Glenn
July 16th, 2009 at 12:21 pm
Thanks Glenn -
Yeah I ‘get’ the competing on price part … I was a self-employed jeweler for years and years and I know from that experience that price point was not based on anything “real” that went into the piece … it was all about presentation.
And when someone came along wanting to dicker – I was very clear that the money they were going to pay was going to remain the same, and if they were sincere, it was only a matter of sweetening the pot (increasing the perceived value), letting go of the outcome to get them to sell themselves.
I guess what this post stirred for me was that I’ve been WAY less clear on that when it comes to sales of ‘not physical’ stuff – the coaching, the advising, the writing, the answering of emails…
Guess I’m kind of off topic here – your last line was:
“You don’t want to work with people who undervalue you from the beginning.
What do you think?”
And to that I say – seems a no brainer … getting clearer on one’s market would help in such a case yeah?
Thanks for the thinking time – still getting clear myself
Make it a great day,
Andrea
May 11th, 2010 at 8:34 pm
[...] great businesses focus on value rather than competition. They don’t compete on price, instead they focus on unique positioning, high touch, and high [...]