Value
Today we’re following on from yesterday’s mistake of assuming people buy based on price alone. We concluded people buy based on what they get for the price and not based on the price tag itself. This concept is called value.
Do you think all people value things in the same way? Of course they don’t! And that’s why price doesn’t come into it. Your goal as a business should not be to position your product or service in a way so that it holds value for every single person. In fact it’s impossible to do this, because all people value things differently.
At a low price point, you might attract customers who place little value on your offering and are looking for a cheap solution. But you’ll turn away customers who place high value on the same thing and who are looking for quality.
At a high price point, you’ll attract customers who place a high value on your solution however people who can’t equate value with the price will not be your customers.
The great thing is you get to make the choice who you want to do business with, but it’s not possible to try and please both types of people.
Who do you want to do business with?
I want to take you back to Mistake 1 — your ideal customer. Who are you trying to serve? What are their challenges? How much value do they see in a solution to their problems? The question is not about your price, the question is, are you talking to the people you want to do business with and how much do they value your service?
Picture this scenario. I own a shoe store. A customer comes in to purchase shoes for a special occasion. The shoes she loves are $250. “They’re too expensive” she tells me and she walks out without buying. When she gets home she finds her son is ill. She takes him to the doctor. He needs tests and medication. The bill comes to $250. Do you think she would think twice about spending the money? Of course not. But it’s the same amount of money.
It’s not about the price. It’s about value.
She didn’t see value in the shoes. She sees enormous value in getting her son well again. She was happy to part with $250 for her child, but not for the shoes.
It’s not about the price, it’s about the value of the solution to the customer.
Passions and pains
Most people will not hesitate about the price when it comes to feeding a passion. Think about how much people spend on golf clubs. No-one needs golf clubs in their daily lives. The only people who buy golf clubs are those passionate about golf. No-one needs a luxury sports car to get from A to B. People who buy luxury cars see value in the status and the quality.
Similarly, most people will pay whatever it costs to remove a pain. Take the doctor example above. Think about security systems, travel insurance, lawyers.
The important thing to remember is not all people value the same things equally. I would never spend $300 getting my hair cut, but I have girlfriends who are happy to pay this on a regular basis. Not everyone values their health enough to pay a personal trainer to motivate them to exercise regularly. Yet I had clients in my personal training business who paid me every month consistently for 11 years.
The key to overcoming the price objection, is to find the value for your customer. You can’t assume value. You must ask questions to uncover how they value what you’re selling. You must work out if you’re talking to your ideal customer. They won’t value your product the same way you do. They may not value it at all, or they may not value it at the price you’re offering, in which case you won’t get the sale.
But your ideal customer will see value and will buy.
Today’s challenge is to consider who you want to do business with. Narrow your target and provide fantastic value to the right people. Seek to understand more about what they value. Find their pain point and the value they place on having that pain removed. When you can do this, you will never need to deal with the price objection again.