When selling, it’s easy to drop your price, but selling by lowering your price is a mistake almost every time. In a slow economy, whether it’s local or national, dropping prices is easy to justify. But here is why you want to do everything you can to not drop your price. When you drop your price for any reason, it becomes the new price. No justification will sound reasonable to your customer when you raise the price back up to where it “should” be. Here are ways to avoid lowering our price;
Change the offer. You can offer a slightly different package of items, or a slightly different model for the same price. It isn’t that people have no money. It’s that they feel like they need a better deal for their money. Just give them what they would see as a better deal.
Add something for free. As long as the price stays the same, you can give something away as a premium to make the offer look more attractive. Adding something for free makes it much harder for a customer to ask for a lower price.
Change the terms. If you add a longer payment term, it will lower the monthly payment (or account billing terms). It will feel to the consumer as though you are offering a better offer, even though you are really just giving better terms.
Add something for a better price on the add-on. Added-on products can be offered for a reduced price instead of free. For example, if you sell men’s clothing, buy a suit and get the shoes for half price. Nobody is going to come back later for shoes and say that the price is twice what it used to be.
But three get one free. If they buy in greater quantity (at one time) they get a discount on the last one they buy or get it for free. This offer can be discontinued later, without the price being compromised for one.
Offer free services or an extended warranty at little or no cost to the consumer. An extended warranty offered for free is a good inducement and feels like a lower price. In fact, if you give the price with the extended warranty built-in, and then lower the price to your regular price without the extended warranty, you are giving the customer the feeling of a lower price with little out of your own pocket. Later, when you no longer include the warranty for free, your price will remain unchanged.
The big reason you do not want to lower your price; The customer will then know that you will lower the price. The price becomes flexible in the prospect’s mind. Once the customer sees that you will lower your price, they will negotiate everything they buy from you.
Do not artificially increase your price, just to make money off. These should be real offers that provide real value. That is selling.
I hope this helps.
About the author: Claude Whitacre is the author of The Unfair Advantage Small Business Advertising Manual.