How to Think About Pricing and Value

Price and Value

If you sell something with a price of X, your customer won’t buy it if they perceive what you sell to be worth X. They have to believe it is worth more to them than X. It must be worth X+. (That + is the value)

Here is a simple example. If you buy a book on Amazon.com for $9.99, you do so believing that the ideas contained in that book are worth more than the $9.99 you spend and the 6 hours it takes to read the book (That’s why books, when read and applied, are the greatest value on earth. I’ve read books that have been worth literally millions of dollars to me).

Your Responsibility

If you allow the decision-making criteria to be price alone, your prospective client will make the decision on price alone.

If you don’t demonstrate how your higher price creates more value, then your prospective client is being responsible by choosing the lower price.

If you demonstrate how the higher price translates to greater value and your prospective client still chooses the lowest price, then they’re being irresponsible. They’re underinvesting.

The difference between a prospect choosing the lowest price or the greatest value is the responsibility of the salesperson.

Make Some Healthy Assumptions

1. Assume your competitors have a lower price. Assume that from your first sales call that you are already behind on price.
2. Assume that your competitors convey the value they create better than you convey the value you create. Don’t underestimate them.
3. Assume that winning your dream client’s business at the right price requires that you must help your dream client understand the greater value that you create.
4. Assume that your dream client will struggle to justify this value internally. Assume that they will struggle to sell their economic stakeholders on the greater investment necessary to producing results.
5. Assume that making the case to buy greater value and making a greater investment must begin at the very beginning of your sales process. Assume that introducing this idea at the end of your sales process is too late.