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    5 pricing rules I wish I’d known earlier

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    Presenting your price with confidence is vital with costs going the way they are in today’s economy. How can you maximize your revenue and avoid buckling under requests for a discount?

    In addition to these five rules, I have a lot more to share with you about pricing that you’ll wish you’d known earlier. Don’t wait another day or make another mistake when presenting your price.

    1. Lack of confidence leads to unnecessary discounting
      More discounts are given based on the failure of the salesperson to believe in their own price than are given based on the demands of the customer.

      Sure, a lot of customers demand price decreases. But more often the real reason they cave is the salesperson isn’t convinced themselves.

      So what happens? They think the customer’s looking for a price discount, so they give a price discount. Or, when the customer goes silent, the salesperson thinks, “Oh it’s because my price is too high.” They cut the price. It’s too easy.

      I challenge you to believe in your price. Believe in the outcomes that you can create for your customers.

      When you present your price with this mindset, you won’t feel tempted to succumb to buyer’s tactics.

      Believe in the outcomes that you can create for your customers.
      Mark Hunter
    2. Never discount a price to get a deal
      All you’re doing is giving away money.

      Some people think, “Well if I just cut my price now, I’ll be able to make it up in the long run.” Unfortunately, this just isn’t true. The price cut you give them becomes the price perception and the price belief that the customer takes to the bank for the next one.

      Just because you give them a price discount now doesn’t mean they’re going to pay full price next time. Worse yet, some salespeople will hear “Oh, well give me a price discount and I’ll bring you a lot of business later on.” It doesn’t always happen, in fact it rarely happens. They just got a lower price out of you, that’s all.

      In addition, when you discount to get a deal, you attract customers who could never afford to buy from you at full price. Now you’ve got a real problem. You’ve given away your goods or services at a lower price, so you’ve attracted customers who can’t afford to buy from you at full price. If so, you’re in a real bad situation.

    3. The most profitable sales can be the ones you don’t make
      You have to be prepared to walk away.

      “Well, if I just cut the price a little more, and a little more, I’ll get the deal.”

      However,if you cut the price so much that you don’t make any money off of it, you would’ve been better off walking away from it. This is especially true with bids and contracts.

    4. Selling price is not what counts. It’s the profit you make that matters most
      For example, you may make a 20% margin on an item. We’ll say it sells for $100, so your cost of goods sold is $80 and you make $20. Then, your customer asks for a 5% discount. Perhaps you’re thinking to yourself as a salesperson, “That’s only $5 off of 100. That’s okay.”

      No, it’s not a 5% discount. It’s a 25% discount, because you’re not changing your cost of goods sold. You’re only changing the profit that you’re going to make. And suddenly instead of making $20, you’re now making $15.

      It’s not the selling price, it’s the profit you make.

    5. Low price is not a marketing strategy
      You sell a low price, the customers you attract will leave you when a lower price comes along.

      Somebody somewhere, sometime, somehow will come up with a price lower than you, and your customer will leave you.

    Customers cannot be expected to pay a premium price until they understand the value you bring.

    There’s a lot to consider before you talk price, and I cover it all in my masterclass, Pricing: How to Avoid Discounting and Sell at Full Price. I’ll cover ROI presentations, value propositions, as well as my rules for pricing, and how to respond to common pricing objections and issues. But that’s not all! See the full course contents here.

    Article originally published on Feb 16, 2022 on Mark Hunter's Blog
    Mark Hunter
    Published February 20, 2022
    By Mark Hunter

    Mark Hunter, known as, “The Sales Hunter,” is globally recognized for his expertise in sales leadership. He specializes in business development and guiding organizations to find and retain high-quality prospects without discounting their fee. His ability to inspire sales teams to create self-motivating and integrity driven cultures, makes Mark Hunter a highly sought-after keynote speaker, consultant and coach. Mark has taken his vision for sales leadership to more than 25 countries and 5 continents where he leads and consults with companies ranging from small startups to global giants. Mark’s number one focus is relationships. He considers it an honor and privilege to connect with the people he is in relationship with each day. It is this passion that has set him apart as a thought leader in the sales and leadership space.

    Find out more about Mark Hunter on LinkedIn