How to overcome price resistance from your customers (part 2)

Shifman Traditional Firm, price tag
Image by djukami via Flickr

Here’s part two of the series on how to overcome your customers price resistance.

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5. Add an element that cannot easily be priced by the buyer. A loose-leaf service, for instance, faces a built-in resistance from the buyer: “Why is it X dollars if it’s just a book?” Supplements help differentiate it from regular books, but publishers have found it even more effective to include a CD-ROM with the notebook. The CD-ROM is perceived as a high-value item with an indeterminate retail price (software on CD-ROM can cost anywhere from $19 to $499), so it destroys the “book to book” comparison between a loose-leaf and an ordinary book.

6. Show the value or return in comparison to the price. Demonstrate that the fee you charge is a drop in the bucket compared to the value your product adds or the returns it generates. If your service helps buyers pass regulatory audits, talk about the cost of failing such an audit – fines, penalties, even facilities shutdowns. If your manual on energy efficiency in buildings cuts heating and cooling costs 10 to 20% a year, the reader with a $10,000 fuel bill for his commercial facility will save $1,000 to $2,000 this year and every year – more than justifying the $99 you are asking for the book.

7. Find a solution with your pocket calculator. With intelligent manipulation, you can almost always make the numbers come out in support of your selling proposition. Example: A high-priced trading advisory specializes in aggressive trades with profits of around 20 to 30% with average holding periods of less than a month. The challenge: Overcome resistance to paying a big price for modest-sounding returns. Solution: Dramatize the profits the subscriber can make with numerous quick trades. Copy reminds readers: “If you could earn 5% each month for the next 10 years, a mere $10,000 investment would compound to a whopping $3.4 million. At 10%, it would be an almost unimaginable $912 million!”

8. Pre-empt the price objection. Most mailings for expensive products build desire and perceived value, then reveal price once the customer is sold. An opposite approach is to state price up front and use the exclusivity of a big number to weed out non-prospects. Example: “This service is for serious investors only. It costs $2,500 a year. If that price scares you, this is not for you.” An element of exclusivity and snob appeal is at work here.

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