What Happens When You Lower Your Prices?

“You get the best out of others when you give the best of yourself.” – Harry Firestone

I discuss this all the time with my business owner clients — how to price their services. You see, often we might hear consumers say, “Well I would buy it if it were in my price range.” And, that idea tempts many business owners or sales people to lower their prices — just to sell more products.

This can be an extremely powerful urge.

However, as you already know, price reductions often create more problems than they solve. I’ve seen too many businesses (my clients) jump down to lower prices without consulting someone objective, only to see their revenues, profits AND business fall.

Here’s some of what you might see price reductions create within your business:

* Decrease of net profits
* Customers rush to the purchase of lower quality products
* Increasing customer demands to drop the price even lower
* Requirement of even more sales to make up the difference in revenue
* Needing a larger quantity of products and inventory to make up for lower margins

And, in the end, there will always be someone willing to go out of business faster than you. And you can’t (nor should you want to) keep up with that.

Remember this: price is not a benefit. The close of a sale is usually not determined on the cost of your product. If you properly “sell” your customers and prospects, they will purchase your products/services no matter what price you determine.

That’s the plain truth — and you’ve probably seen it in your own purchase patterns.

If a customer or prospect doesn’t buy — and they claim the cost had something to do with it — you can guess they probably wouldn’t have purchased anyway.

As a small business owner, and marketer, your job is to sell your products and services. But the actual art of selling has nothing to do with the price of the product.

By the time your contacts find out about the price, they should be determined to purchase no matter what the cost.

So, find “real” benefits (value) to sell to your customers and prospects. Help them to see how great their life is with your product, and you’ve got a customer. Point out their current pain, and your contact will do anything to get rid of it.

Set your prices and hold fast. If you’ve marketed correctly, you will still have customers anxious to do business with you.