Pirozzoli & Williams

Al Pirozzoli

“Your price is too high”
…words that have become terribly common to those who must convince clients and would-be clients to purchase.

Price, as a strategy, has been used by buyers quite effectively. It’s such a negative issue that it causes companies to undermine their real worth and operate in an atmosphere of fear. This sparks a domino effect resulting in a debilitating mindset. The outcome creates severely wasted energy focused on beating competitor’s pricing rather than beating the customer’s real problem.

In 25 years of sales, marketing and executive training I have never yet met a sales manager who told me that his sales people come in asking if they could raise their prices. It’s the opposite. More often than not sales people want to lower prices.

Sales professionals often attempt to support lowering prices with a wide range of reasons to back up the appeal that it all comes down to price. The businesses out there on the front lines that grow profitably and prosper will attest that leading with the lowest price was not a strategy they applied.

There is no such thing as leading with low price.
Low price cannot lead. Low price can only fall behind.

I have been very fortunate during my career to see first hand the extraordinary power of differentiation. It is not merely a word, it’s a verb. It’s full of action- a powerful tool for creating results. 

Dif-fer-en-ti-ate:
To set apart in a way that creates real value, demonstrates solutions and uniquely
supports a higher price point. A clear and compelling differentiation of your business is key.

What does this have to do with pricing? Everything! Keeping the definition just covered in mind, take a look at this next positional statement with more focused thinking. When a prospect remarks that the price is too high he is reflecting back what you have provided—mainly that the value he has perceived does not allow him to justify your numbers. That’s a drastic lack of differentiation in a relevant, literal, real world scenario. And it happens far too often.

This selling problem begins with the inability or unwillingness to think from the outside-in rather than inside-out. In short, thinking like the customer. What the customer needs, what the preferences are, where the pain is.
If you are focusing on what you think is important, instead of what the customer thinks, you will be at a disadvantage. A costly one in more ways than one:

-You lose credibility if you lower price after the fact and especially if you do so quickly. That sends up a red flag perception that your company has been overcharging for some time.
-If you get an account on lower price then you can easily lose it to a competitor who goes lower, even by a small percentage.
-You never really gain a relationship. All you have is a purchase order.
-The customer will always be evaluating you on price. They will ask for more and not expect to pay any additional dollars.
-The more you try to establish value in a recovery mode the less you will be taken seriously.

Differentiation is useless unless it connects to customer wants, needs and preferences. And, understanding how they do business. What their world is like, what they face. Selling at the best price (and that doesn’t mean over charging or gouging) is all about preparation. A business must prepare its value differential clearly and be able to articulate it in words and in printed materials. To get through the clutter and down to the reality of your value differential requires a good deal of preparation. That’s where the opportunity is hidden.

There's a quote by Abraham Lincoln saying that— if he had eight hours to cut down a tree, he would spend six hours sharpening the axe.

Now there’s a man who understands the power of preparation. No sales person can ever stroll into a sales opportunity and just shoot from the hip. The customer will out-draw them every time if they are not prepared with a compelling differentiation. Once you have a value differential you can effectively lift your value perception and draw the right kinds of customers. Otherwise all you have given the prospect to weight you on is price. He will then differentiate you on price—just another supplier offering the same stuff—therefore why would the prospect entertain paying more? That thought should make us lose sleep at night. “May it never be,” to quote the brilliant St. Paul. Differentiation emphasizes total solutions, problem solving, making the buyer’s life easier or other critical issues.

Sell at the best price:  identify and extract untapped potential from your business, differentiate it, and then draw the right customers to you. That’s the only reason sales and marketing exists.

The best way to assure your business future is to create it.

Pirozzoli & Williams
203.232.5527