The Price Is Not Everything

Source:
insurance news
"We are losing on price," or "Our prices are too high." One hears these familiar phrases time and time again.

However¸ in most service-orientated businesses¸ there is no clear "right" price for the service offered to the client. The majority of buyers have a well-developed sense of what businesses charge. The true answer depends on the value the buyer places on the service he is seeking to purchase.


Value = Apparent perceived value of service = Price

Your quoted price may be higher than your prospect's budget will allow for that particular service. However¸ in many instances if the buyer can see that your service will add to his company's bottom line¸ the budget can generally be revised upward. In order to avoid failure you must create a need for your company's service in the buyer's mind: i.e. "apparent perceived value for the service." Your failure to convey a higher apparent perceived value than the company that charges less for a similar service¸ will assure that the competition will walk away with the order every time.

A few suggestions to keep in mind before your presentation:

"Will the client see an overall benefit to his company?"

"Is the client just a price shopper who will leave you for a lower price in the future?"

"Will this client be a benefit to my company over the long term or is this a one-shot deal?"

"Why has the potential client left your competition? Was it lack of service¸ quality of work¸ price?"

If as an entrepreneur you can answer these questions clearly¸ then you are ready to face the client and win the project. Remember one important fact: that your confidence level¸ presentation and attitude will play as big a role in your success as your quoted figures.

Stewart Hobden is President and co-founder of Businessmatch-maker.com and is a regular contributor to Businessmatch-maker.com