When you lead with your higher price, you have a chance to justify—and demonstrate—the value you create that is worth paying more to obtain.
When you provide your higher price later in the sales conversation, if you have not differentiated yourself and your offering from your competition, you will have no easy time defending your pricing.
Leading with Your Higher Price
I was fortunate enough to have grown up in a commoditized industry where differentiation was something close to impossible, outside of the difference you might make as a salesperson. Some competitors tried to differentiate using the size of their company, the number of locations, or some unique process, none of which carried much weight with clients, most of whom knew better. When you work in an industry that is—or is being—commoditized, having a lot of competition means lower prices and thinner margins.
At some point, I learned that it was easier to tell the prospective client that we would likely have a price that was more than they were paying, but that we could provide them with better results if they invested a little more. I wasn’t using this statement to qualify them; I was starting the conversation with what was necessary to produce better results.
Taking money out of a solution never provides better outcomes and invariably lessens or eliminates the desired results.
There are a couple of prerequisites for executing this strategy, without which you aren’t likely to succeed.
You: Value Creator
A large part of your success with this strategy depends on your ability to create value for your client. Not your company. Not your product, service, or solution. Not the slide deck your marketing department put together. You alone.
In some large number of the 4,100+ blog posts I have written, I have referred to this idea as “chops,” “business acumen,” and “situational knowledge.” I’ve described it as being “consultative,” “a peer,” “a trusted advisor,” and “counsel.” I’ve also described it as Level 4 Value Creation.
My first book, The Only Sales Guide You’ll Ever Need, is a competency model for becoming the kind of person that clients want to buy from because of the value they create. My second book, The Lost Art of Closing, is a guidebook for having consultative conversations that allow you to control the process and gain the commitments that will enable you to create and win new opportunities—and ensure your clients succeed. My third book, Eat Their Lunch, is a framework for dispelling your competitors, as well as being a blueprint for developing your “chops.”
You have to provide your client with the confidence that your higher price by giving them the experience of what is going to be different when they work with you. Selling is, in large part, creating a preference to work with you instead of someone else. What other experience does your client have to go on, if not the conversations they’ve had with you?
Are you smarter? Do you have a deeper understanding of your client’s world? Do you have a better lens through which to see their challenges and opportunities? Are you worth a more considerable investment?
You: Justify the Delta
Your prospective clients don’t know they are underinvesting in the results they need. Many of them are unaware that by lowering the amount they invest, they are making concessions that make it more difficult for them to achieve the results they need. The lower the price you pay for something, the greater your concessions. It’s often true that the lower the price you pay for something, the more it costs. So what are the higher costs your dream client is paying because they aren’t investing enough in the result?
It is not your client’s job to rationalize your higher price. You have to make sense of that for them. You have to explain the significant investments you make with the higher price they pay and how that investment improves their results. It’s also likely that you have to describe how paying more lowers their costs.
In all cases, it is your job to justify the delta, the difference between your price and your competitor’s.
Avoiding Bottom Feeders
In every market, there are bottom feeders. They believe that price is the most critical factor in choosing a vendor. They’re looking for a vendor, not a partner. Because bottom feeders don’t value anything outside of the price they pay for what they perceive as a commodity, they don’t invest in results.
Is your higher price going to eliminate some prospects from even engaging with you? Doesn’t it already?
At some point, even bottom feeders start to recognize the higher costs they are paying for accepting a price that doesn’t allow their vendor to serve them effectively, at which point, they are susceptible to investing more. You are better off working with people who are focused on producing better results than people who are looking for a deal.
In all cases, the best deal you can give any client is the result they need, not providing them with a price they believe is a deal.
Stop Fearing Your Higher Price
Your higher price is a competitive advantage. If you believe it is challenging to sell at a higher price, try selling at a lower price, where there is no differentiation on results.
Your higher price is evidence you create more value and are worth more. It is a mistake to believe that your higher price is somehow detrimental to selling effectively. If you struggle with this idea, then working on the two approaches above will improve your ability to sell at a higher price. You start by working on your ability to create value for your clients and learning to explain how the greater investment you ask for produces better results.