Stop discounting: 5 easy tips to sell at a premium price
Tuesday, February 25, 2014
Have you ever discounted your price in order to close a deal? Have you ever touted lower prices in order to get a foot in the door? Then you are in the vast majority of companies that view discounting as a necessary evil.
However, discounting not only destroys your sale's profitability, but it also lowers your value in the eyes of the customer. It is time to stop the discounting and enter into the world of premium value.
Here are five easy tips to help you sell at a premium price.
1. Be proud of your premium position
Most salespeople are afraid to propose solutions that are more expensive than those of their competitors, but the top salespeople use their premium pricing as an indicator of their position in the marketplace. Great salespeople will explain to prospects that, "If you are looking for the cheapest vendor, I'm not it. We are about achieving results."
By taking pride in and leading with the fact that your offerings are more expensive than those of your competitors, you will immediately appeal to the prospects that want value.
2. Understand the challenges
Prospects are never buying your product or service. In fact, they don't care about what you have. The only thing they care about is finding the solutions to their most critical challenges. So speak their language by spending the first part of a meeting learning about these issues. You can then begin to understand what the prospect most values in a purchasing decision.
3. Focus on your value
Once you have learned your prospect's most critical challenges, it is time to understand the value of solving those challenges. Remember, the value of your offering is directly proportional to the value of the challenges you are solving for the prospect.
For example, if your prospect's challenges are costing him $500,000 in lost revenue, and you can help solve those challenges, then the value of your service to the prospect is $500,000. Therefore, when your solution costs $50,000, it is a no-brainer for the prospect.
4. Pile on the goodies
Many organizations focus on selling a bare-bones solution in order to keep the cost low. The problem with this strategy is that minimalist solutions almost never achieve the results your customers want.
Rather than stripping your offering to achieve a low price, pile on every added-value goodie that you can to raise the price. All customers want solutions to their challenges, and the right customers are willing to pay for those solutions. Make your offering irresistible to that premium customer by piling on massive value.
5. Propose three options
You are not a mind reader, so stop assuming you know exactly what your prospect wants from you. After you have fully discussed and understood your prospect's challenges, present solutions at three different levels.
The lowest-end solution should be the cheapest solution that will solve the prospect's challenges. The highest-end solution should be well above your prospect's budget but include every possible bell and whistle to solve the prospect's challenges and more. The mid-level solution should be somewhere in between.
By offering three choices, you are not only creating optionality, which prospects love, but you are also giving your prospect the opportunity to select the highest-level option. If you have focused on value throughout the sale, at least 20 percent of your prospects will choose the top option.
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