There is only one thing that will allow you to successfully compete against lower prices. That one thing is the perception of greater value, according to Anthony Iannarino in an article for Hubspot.com.
The impediment to higher prices is the perception of value. The question is what do you do to justify the higher price that your prospects perceive as something worth paying more to obtain?
Some of the prospective customers you call on will perceive the ability to lower their costs overall as an outcome for which it is worth paying more. Let’s say by spending 10% more on what you sell they reduce their overall cost structure by 15%. This is easy math, and it’s an easy justification to spend more if your prospect values that 5% enough to change.
Your high trust, high value, and high caring approach may provide your customer with a greater experience, and one that gives them the peace of mind of paying more to have a smart, value-creating, future-oriented partner helping them solve problems. This level of service and relationship is widely valued.
When the perception of greater value exists, it isn’t difficult to command a higher price. There are two cases when selling a higher price is difficult.
When you can’t differentiate why your dream customer pay more, they are right not to pay more.
If you can’t clearly explain what you differently, how that makes a difference, and why your prospective customer should pay more, they are not going to pay more. Commanding a higher price means being different in way that makes a difference. The difference that you make is what creates the perception of value.
What do you that makes you different? Why do you do it differently? How does what you do differently create greater value for your customers.
Of course, there are some tough cases who simply don’t perceive what you do as something for which they would invest more.
It is critical that you perceive that what you sell creates greater value for your customers. If you don’t believe, there is no reason for your dream customer to believe either. You transfer your confidence or your doubt. That said, some of your prospects won’t perceive what you do that is different or how it makes a difference as having greater value worth paying more to obtain.
You might be able to produce far greater results requiring less effort by your customer, and yet, to them, it may not rise to the level worth paying more for — even when you can validate the ROI with strong evidence.
What you sell may have longer life, requiring your customer to repurchase less often than they would with what your competitors sell. If, however, they don’t care about how long what you sell lasts, they aren’t going to pay more.
Your higher price may even lower their overall costs by more than your prospective customer can imagine, dropping serious profit on their bottom line. Still, they may not care enough to pay more, even to make more money.
You will come across prospective clients who are woefully penny-wise and pound foolish. Your only hope for convincing these hapless souls to do what is in their interests is by discovering something they do perceive as greater value for which it makes sense to them to pay more.