In our last blog post titled “How Much Should I Charge,” we discussed pricing and how much you should charge. If you haven’t read it yet please read the first one so this one will make more sense to you. But just for a quick recap, check on your competition and find out how much they are charging or how much the item sold for last time, look it up online, call as a prospective customer, etc.
In this post we are going to explore how you go about beating your competition on price without giving away the store or as some people overuse the phrase “without leaving money on the table.” By using the method we are going to share in this post, you will always know where you stand and you will know that you are going to win each and every time, so let’s dive in.
Once you have your research done and you know that your competition is selling an item for say $100.00. You also know that if you sell it for a lot less you won’t make much profit but you need the business. Here is how to win at this pricing game and once you have gotten through the tough part the rest is all money in the bank.
For the sake of our hypothetical $100.00 example we are assuming that you can do this (if the numbers don’t work for you, just adjust them to fit into whatever price range you are in whether it is very small numbers or very large, this works in all categories).
Go in on your next bid at $90.00 to win the business. The reason that you want to do this is because if you believe that your product or service is better than your competition, you will have to at least get in to prove that you are better. If you believe you are better but never get a chance to prove it you will never survive long enough to build your business.
Now that you have won the bid at $90.00, wow the customer with over the top service, products, follow-up service, communications, etc. Now they are really happy with the choice they made and they will give you their next opportunity to bid. This time, go in at 91% and of course, make sure that you keep up on all of the reasons that you won their business in the first place; great service, over the top love for your customers, etc.
The next opportunity you get, go in at 92% and keep going like this. At some point you are going to hear a complaint about the price, maybe when you are bidding at $100.00 or maybe at $105.00 or whatever it happens to be. This is extremely important – so pay attention! The customer has complained, you offer to get it fixed and lower the price to say $102.00 and they are now happy again. You just found their pain point and the price that you will go in on every bid (of course if it is the same product and quantity, etc.). Make sure you never lower your customer service, love for your customers, etc.
Now whoever is doing your pricing, begin to build a “cheat sheet” of sorts. You want to keep a log of all of your customers and what your prices and margins are so that you can always be consistent. Once you have done this you will always be able to look at your sheet and see what you need to price your product or service at for each customer in order to always win. By doing this you have won the customer with your pricing and your service and you have locked out your competition.
In our next blog post we will discuss locking out your competition so that you can dominate your marketplace.
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Until our next post – we wish you all success!