Have you ever gone to a store with a good sale, and found yourself buying a lot of full-priced stuff too?
Or how about sitting down at a nickel slot machine at a casino, and marveling at how quickly that $100 fled your pocket?
Some people feel it is important to brand themselves with high prices. It implies quality and exclusivity. And sometimes it is exactly the right thing to do. No one buys a Cadillac because it’s the cheapest car on the lot, or hires Carol Roth as a consultant because she is inexpensive. (Although I might counter that she is actually a bargain from a value perspective.)
But sometimes magic happens when you play at the other end of the spectrum, and make the barriers to entry really low. Here, when someone pops the inevitable price question, your answer has a totally different strategic objective: to put the buyer at ease. My experience is that this approach often paradoxically leads to more sales.
Let’s say that someone wants to hire me to train their company on customer skills. Here is my usual response:
“My pricing starts as low as $20. Really. Anyone can walk into Barnes & Noble, buy one of my books, and develop their own training programs around it. No permission is needed from me, and I’d be delighted.
However, people often find it more cost-effective to have me create the training for them. My services range from a two-hour webinar at (modest $ amount) to having me live on-site for (expensive $ amount). And you can purchase lots of optional goodies such as consultation, customized exercises, content licensing, etc. I am happy to work with whatever makes sense for your budget. Let’s talk about your needs.”
Guess what? Usually I walk away with an order for a full-price solution. Even though I would be more than happy to sell people a cheaper one if they wish. Here is the psychology of why this works so well:
You build trust. When someone asks you the price question, there is often an invisible bubble of defensive energy surrounding it. They are mentally prepared for a tug of war. Pop this bubble, and you direct all of this defensive energy into creating solutions with you.
You sell value. By making yourself easy to work with, you can offer a smorgasbord of value to potential customers. When those values look tempting enough, more often than not, they will sit down and eat. Play the exclusivity card too soon, and they’ll never get to the table in the first place.
You put the customer in the driver’s seat. Once you build a relationship, I can’t tell you how many times I’ve told a customer, “You don’t need to keep spending money with me,” and they come back and say, “Yes we do!” Focus on what the other person really wants, and often the answer is you.
Note carefully that offering good entry options is not the same as under-pricing your wares. And I completely respect the exclusivity types, particularly when they can walk the talk. But answer this simple question: How many times have you or your company asked about price, heard a number that made your head spin, and then walked away? I’ll bet lots and lots of times. That’s why I’m a big fan of letting a little consumer psychology open doors for me that are often closed to others.
Next time someone asks you what you charge, have an answer that puts a smile on their face – and then offers them options with real value. The results may surprise you!