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How To Hold Your Price

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Are you fed up with giving price discounts just to secure a deal?

In this VLOG, Grant explains that while there’s no silver bullet, there are things you can do to avoid price crumbling.

Are you fed up with giving price discounts just to secure a deal?

Giving a discount doesn’t just eat into your profit margin but it also devalues what you do. While there’s no silver bullet, there are things you can do to avoid discounting.

First of all, when selling to a customer, you should always understand your negotiable variables. By that we mean; what are the things that are low cost to you and high value to your customer and conversely, what’s low costs your customer and high value for you.?

For example, let’s say you’re selling a car and someone asks for a discount. You might say to them, well I’m sorry, I can’t really give you a discount on this particular model, but what I can do is throw in some leather seats. Now, leather seats might be something that in the grand scheme of selling a vehicle isn’t very expensive for the manufacturer, but actually is high value to a customer who really would prefer leather seats from the fabric ones.

The second thing to do is always to trade concessions reluctantly. What we mean by that is people like to feel they’ve got a good deal and in order to feel they’ve got a good deal, they’ve got to think that they’ve got to your bottom line. If someone asks for a discount and you straight away agree, people will feel they might be even be able to push you a bit more. Whereas, if you are reluctant with the concessions you give away, they’ll feel that they’ve reached your bottom line and ironically, actually believe they’ve got a better deal because of that.

Let me give you an example of trading concessions reluctantly, and this can actually be used in tandem with negotiable variables. Now the key phrase is ‘if, then’, if I give you something, then can you do something for me? So for example, if someone asks you for 20% discount, you could say, I’m afraid on this particular package I could only give you 10% but if I were to give you 10% then would you be able to pay within seven days?

Now that is low cost to them because they’re going to pay anyway, but it can be high value to you because from a cashflow point of view, having the money straight away is always very good for business. A further technique is ‘another price, another package’.

So let’s go back to our car salesman. Let’s say a customer says to them, could I have a 10% discount on this? Then they could say, yes, I can agree to a 10% discount, but I’m afraid I wouldn’t be able to include the metallic paint… on this, you’d have to have regular paint. So the idea is that if they want to pay a different price, they get a different offering at the end.

I’m sure you’re not ripping anyone off, which means that the price you charge you believe is fair. So in that case, don’t be too quick to price crumble. Use some of these techniques to hold your price and get better profits.

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