Secrets to make more money by negotiating value instead of price
What is price? Price is simply a perception of value.
A lot of people think their products or services don’t sell because of price. Price is never a major factor unless the prospect is not in your income target market. If you bought a cup of ice cream from a store for N1, 500.00 why did you pay that amount without complaining it was too expensive? You had the money or you ‘perceived’ that the feeling you’ll get by having the ice cream will be greater than the feeling of having the N1, 500.00 in your pocket.
When did the perception begin? When you tasted the ice cream? Of course not, your perception began from the beginning – the name of the store, the ambience of the store, the quality of customers you saw at the store, the brand and look of the ice cream or even a referral. Everything counts in creating perception. No one knows what creates the perception of a prospect because no two prospects are alike. Therefore pay attention to every detail of your business. Your appearance, business cards, brochures and other instruments of your business must always look neat and clean.
Knowing that perception is value and value determines price, feel free to give any price you feel you’re worth. Your price will never be higher than your confidence in your product which is directly tied to your self-confidence and your confidence to deliver value.Be proud of your price, that’s you. Be proud of yourself. A Mercedes-Benz retailer won’t cower when a prospect says a Mercedes-Benz is too expensive but instead will let the prospect know that a Mercedes-Benz is more than a car but comes along with some prestige (value).
Time is not money, value is money. The poor exchange time for money, the rich leverage on other people’s time for money. However, you can be as successful as you desire if you focus on value. Discuss value, not price. Always give your prospect price options; for example
Option 1: List the value you’ll be offering. Quote the price: N10, 000.00
Option 2: Value from option 1 plus additional value you’ll be offering for option 2. Quote the price: N13, 000.00
Option 3: Value from option 2 plus additional value you’ll be offering for option 3. Quote the price: N17, 000.00.
What this does is that it makes the prospect take a mental shift from, “should I do business with you?” to “How should I do business with you?” The first statement means you’re still being considered, the latter statement means you’ve gotten the offer. Just for the records, most prospects pick option 2.
Finally, never negotiate price downwards without negotiating value downwards. Remember, price is a perception of value and customers will always perceive they’ve gotten what they paid for.
Iyore Ogbuigwe is a Sales Coach at Ultravantage Solutions