I had a powerful discussion yesterday with a room full of people from one of our client companies. We were talking about their new service area, and how to position it. Their company is in a highly competitive industry where differentiation is hard, and where price is highly scrutinized.
The fear in the room is that this service, which is relatively new, and one that most of their competitors do not have, would be perceived by their market as expensive.
So, I asked everyone in the room, “Is $1,000 a lot of money?” And we all agreed that in a vacuum, without any other context, the answer is “yes.”
Next question… “If I am going to buy something, is $1,000 expensive?” And we all agreed that the answer to that is “it depends.” If the thing I am buying is a toothpick, then yes… $1,000 is an obscene price (unless the toothpick was made of gold, currently at @$1,800/ounce.) But if the thing I am buying is a brand new Audi? Then no… $1,000 is still an obscene price, but in the other direction. That is a very cheap price, in exchange for that new Audi.
Numbers need context. Any discussion of price requires context to understand the actual transaction. Otherwise, we are talking about the numbers in a vacuum, and the numbers will mean different things to different people.
Simple point today, for sure. But every day we hear people at our client companies struggling to justify the price of their good or service. All too often we hear people discussing price simply by stating the price, without context. In any persuasive environment, we need to not only be able to recite the facts. We also need to be able to put those facts into a context. So instead of simply stating the price, shape the discussion (and the perceptions) with answers to questions like these:
- What do you get in exchange for that price?
- What will you save?
- What risk will you reduce?
- What upside will you create?
- Will that service save you so much time, that you will be able to focus on other higher value activities?
- Will the service allow you to reduce costs in other areas?
You get the idea. The context around what the transaction actually means can change the perception of the price dramatically. So when the time comes to talk about price, make sure that discussion is not just a listing of the numbers. Make sure to put those numbers into a context that will impact the perception of the actual transaction.
Good luck, and have a great day!
We believe that great communication skills change the world. We transform people and organizations of all sizes with simple, repeatable techniques, through an integrated platform of corporate training, coaching, and asynchronous learning.
Our entire business has been built on the referrals from satisfied clients. So, if you enjoyed your experience with The Latimer Group, or if you like what you read here, please share your experience with others. And if you would like to know more, please contact us at info@TheLatimerGroup.com, or visit our websites The Latimer Group and LatimerNext.
We look forward to hearing from you.
Looking for more from The Latimer Group?