Successful Marketing Tools Blog

Price Raising Techniques

Exclusivity

People will pay for exclusivity. Some businesses have exclusive memberships. Some have high priority customers with preferential buying times. People want to be treated as special, especially in today’s crowded market place.

Are there ways to make your product or service more exclusive? Customers pay more for exclusivity.

I belong to an exclusive jewelry buying program. I must supply a code to access the store. I receive special mailings about their products. I am treated like royalty when you go to the store. People off the street are not allowed into the store. When I want to buy a special piece of jewelry, I go to this store. Do I buy all of my jewelry here? No, but when I want something special I go there. I am sure that I pay top dollar for what I get!

To be continued, your comments are welcomed,,,

Price Raising Techniques

Change Your Advertising Words

The words you may be using to describe various features of your product may be depreciating the value of your product in the eyes of the customer. Using words like “easy to use”, “quick,” “ordinary” may lessen the value of your product.

In relationship to pricing, customers feel that words like “common sense”, “easy to use” and “ordinary” are less valuable than are words like “unique”, “special”, “one of a kind”. Review your advertising and marketing materials and make sure the words you use are enhancing your product and not depreciating it. By using words to appreciate the value of your products and you can charge more.

To be continued, your comments are welcomed...

Price Raising Techniques

Testimonials about Your New Price

Get a testimonial about your higher pricing. Instead of trying to hide from higher pricing, be bolder about it. Get a testimonial from customers about your higher pricing. Like other testimonials, these can be powerful tools for helping you sell at higher pricing.

Here are a few examples.

“John’s product is the best. He charges more than some of his competitors, but the price is worth every penny because you get exactly what he promised.”

“I was reluctant at first because I saw cheaper options on the market. After I tried it, I will go back every time because it is worth the extra cost.”

“I bought a cheaper model and it failed within the first year. Boy, did I make a mistake. I bought John’s product. What a difference.”

Create one or more of these testimonials by asking customers for their help by specifically referring to your pricing issue. Or you could write one yourself and ask the customer to change any of the language to fit the situation.

To be continued, your comments are welcomed...

Price Raising Techniques

Understand Your Customer’s Buying Motivations

Another strategy is to understand why customers buy your product or service. The better you understand these buying motivations, the more non-pricing options you can offer as reasons for the customers to buy from you.

Contrary to most sales people’s perceptions, price is rarely the first motivation for buying. Here are the other motivators that constantly appeal for most customers;

Quality
Service
Reliability
Delivery
Convenience
Competence of the sales person

When you know the reasons why your customers buy you can use these instead of pricing considerations.

List the Reasons Should Buy From You

The flip side of customer buying motives is a list of reasons why customers should buy your product or service. Have you taken the time to develop such a list? If you don’t have a list, in the heat of the sales presentation, you may find yourself quickly retreating to price considerations.

Take the time to create a “reason to buy list”. Review this until it becomes second nature to you. Make it part of your sales presentation. Get additional input from some of your best customers—why did they buy from you? When this list becomes part of you, you will find you make fewer references to any pricing issues

To be continued, your comments are welcomed,,,

Price Raising Techniques

Avoid Words That Set Up Pricing Objections

Often without realizing it, sales people set themselves up for pricing objections by the words they use. What will the customer think when you use words like, “Our usual price is”, “Our normal price is” “What will it take to close the deal?” These words and expressions signal to the customer that you are ready to deal on the price. Stop using the words and you will eliminate many price objections. Stating your prices directly and firmly is a simple and wonderful strategy.

Don’t sell on the future come

One way of losing money is to sell on the future come. You think that by getting your foot in the door, you will get even more business in the future. You cut your prices to secure future business. This does not work for several reasons.

If you are facing competition now, what makes you think you will not face competition in the future?

Let’s say your costs go up by 10%. You must now pass on those costs to your customers. Now you will need to make up the first discount plus the new cost increases. If you just add the 10% new costs, you actual fall further behind then your original position. If you try to add it together, your customer will think you are gauging them.

Betting on future business is a risky way to do business. It’s better to add premiums or bonuses to get future sales than to reduce your prices based on hope and prayer

To be continued, your comments are welcomed...

Price Raising Techniques

Be the Best

Simply be the best in what you provide to customers. Customers will always pay for the best and pay higher prices for the best.

To make this strategy work, you must do more than just claim you are the best. Every business in the world says they are best. You need to site independent or outside sources that recognized your business or a feature of your business as being outstanding. This could come from awards, recognition, certifications, etc.

Here are some examples:

Your business has received the JD Powers award for outstanding quality.

You have the longest warranty in the industry.

Surveys show that 9 out 10 customers pick your product.

In a side by side taste test, Pepsi out performed Coke.

The Chamber of Commerce has awarded your business, your product, your sale person, business,
product, sales person of the year award.

Your technicians have been fully certified for their excellence and knowledge about…

The most powerful recognition comes when it addresses areas that are important to the customers. The closer you come to showing your quality around these benefits, the more you can charge for your products or services.

To be continued, your comments are welcomed...

Price Raising Techniques

Stop Selling Your Time

Move away from an hourly fee. When you price yourself by the hour, you put yourself into a pricing trap. What are the pitfalls of this trap?

First, you limit your income. Your income is limited to the amount of hours you can work. If there are 40 hours of work in a week, these are the limits of what you can make when you charge by the hour. There is a finite limit of hours no matter how hard you work. You are probably already working too many hours and not showing the profits you want. Hours for dollars will never get you the profits you want.

Second, using an hourly wage can set up potential nit picking from a customer. Because you have made the worth of your efforts equal to the hours worked, the customer can now use hours as a standard by which to judge you. He may see only a few of the hours you actually worked and want to pay you only for the hours he sees.

Third, setting an hourly wage treats you like an employee rather than a business owner. Employees are paid on an hourly basis. Business owners are paid differently.

Fourth, charging by the hour can turn you into a commodity. You make it easy for customer to price shop you. You have given them the very means (hours) by which to compare you to your competitors.

Always charge for your efforts based on the results you achieve. Your strength as a small business owner is to separate yourself from your competition--not by being compared to them on an hourly basis.

How do you move towards result orientated pricing? Here’s simple exercise to point you in that direction. Take five of your favorite customers and look at them before they used your product or services. Then look at them after they used your product or services. What are the differences? What were the results? Be very specific and write them down.

It is results that you sell to customers rather than hours. They don’t care if it takes two hours or five hours. They are buying results from you. Move away from hourly to visits or treatments or results. Customers ultimately are buying results. The more you can attach your prices to results, the easier it is to break the pricing trap.

To be continued, your comments are welcomed...

Price Raising Techniques

Move Up on the Marketing Scale

Have you ever wished you could deal with higher end clients? Go for it. Here’s how.

Focus half of your marketing efforts on higher end customers. Chose a fancier zip code, upscale advertising mediums, go wherever these customers look for answers to their problems.

By using half of your marketing efforts you will discover new services and ways to serve these customers. Once this group becomes your customers, you will be making more money from your higher end products and doing less work.

In our carpet business we secured the city contract for public housing. The bid was worth $200,000 per year. We discovered that we were making very little on this contract compare to other customers in our business. The second year, we declined to take the contract. It was really scary to give up $200,000 in guaranteed business.

Instead of this public housing business we concentrated our efforts on higher middle class customers. Within six months, we had shifted the $200,000 of business to higher paying customers and more profits. We made more profits from doing the same amount of work.

To be continued, your comments are welcomed,,,

Price Raising Techniques

Avoid Words That Set Up Pricing Objections

Often without realizing it, sales people set themselves up for pricing objections by the words they use. What will the customer think when you use words like, “Our usual price is”, “Our normal price is” “What will it take to close the deal?” These words and expressions signal to the customer that you are ready to deal on the price. Stop using the words and you will eliminate many price objections. Stating your prices directly and firmly is a simple and wonderful defensive strategy.

Don’t sell on the future come

One way of losing money is to sell on the future come. You think that by getting your foot in the door, you will get even more business in the future. So you cut your price to secure future business. This does not work for several reasons.

If you are facing competition now, what makes you think you will not face competition in the future?

Let’s say your costs go up by 10%. You must now pass on those costs to your customers. Now you will need to make up the first discount plus the new cost increases. If you just add the 10% new costs, you actual fall further behind then your original position. If you try to add it all on together, your customer will think you are gauging them.

Betting on future business is a risky way to do business. It’s better to add premiums or bonuses to get future sales than to reduce your prices based on hope and prayer.

To be continued, your comments are welcomed...

Price Raising Techniques

Know Your Competition

Do you think the Vikings go into a football game without scouting their competition? They would lose every time. Don’s assume you know what your competition is doing or charging. Find out. How do you do this?

Check out their website if they have one. Get a copy of the literature they pass out to customers. Observe their crews in action on a job site. One of the easiest ways is to use a secret shopper. Have someone, where their phone cannot be traced, call and ask about they do and how much they charge.

See how the competition is handling their business. You can learn the good and the bad from them. You can learn how they price. Keep this information current by redoing it several times during the summer season.

To be continued, your comments are welcomed,,,