As much as we strive to sell our prospective clients on the value of expert advice, or solutions to their biggest problems, price will always be a factor. Obviously the primary goal is to provide such a unique and valuable experience that your clients would (literally or hypothetically) pay even more than you’re asking.
So, knowing price will always be a factor, how do we know if our service is priced too high, or even too low? One of my favorite answers on this subject comes from the book, “Selling the Invisible”, by Harry Beckwith. According to Harry, here is how to effectively evaluate your pricing:
- If no one complains about your price, it’s too low.
- If everyone complains, it’s too high.
So how much “resistance” is right? How do you know if you should raise your price, or lower it?
The answer, according to the book, is 15 to 20 percent. One of the reasons, and something we all need to remember when selling, is that there will always be around 10% who will always complain about price. They always want some kind of deal or they may have had a bad experience in the past, and are now distrustful of every price.
Disregard these folks that will argue or object no matter what price you have offered. For everyone else, look at how often you get resistance? If this is about 10%, out of the total of 15 to 20 percent, then that is okay. If it is gets up above 25%, it may be time to scale back. Or…enhance your service offering or the value you provide in return for the money you are paid.
“Setting your price is like setting a screw. A little resistance is a good sign.” – Harry Beckwith.