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Are You Charging Enough???Dear Colleague, I continue to hear the arguement and poor excuse that contractors, and salespeople in general, lose sales because they think they are charging too much. What is "charging too much"? Why do salespeople buy into the notion that there is a ceiling on what they can charge in the marketplace? I am going to give you a list of buyer motivations and perceptions later in this newsletter, so get ready. Let's be candid here. I like a good deal as much as the next person. However, I rarely make my buying decisions based soley on price. I look at other, more important factors to me. Is it convienent? Will it make my life easier or more pleasant? What image does it project? Will it last longer and be maintance free? Will it bring enjoyment and a thrill to my life? Will it be memorable? Are there less hassles or fewer decisions in the buying process? As crazy as it may sound to you, I have even made decisions to buy a product or service if I thought I could use the purchase as a teaching example in my seminars and books. That, my friends is percieved value. Your perception of the vaule of a product or service is the reason you will buy. Furthermore, you are the only one that will determine that value perception. Here is an example of what I mean. I spent most of last week in Las Vegas teaching four programs at the International Builders Show. It was a blast and by all accounts, my programs were a smashing hit. After four days of teaching, I was emotionally and physically spent. I needed to decompress and unwind so I stayed an extra day in Vegas and rented a Harley Davidson Ultra Classic. I toured Red Rock Canyon, Hoover Dam and the Nevada countryside for most of the day. I certainly didn't need to ride a Harley to decompress. I didn't need to spend the money for the extra time in Vegas or to rent the bike nor did I need to take the risk that comes with motorcycle riding. I could have spent the time and money at a day spa or just sleeping in my hotel room. However, my perception of enjoyment, and as a personal reward system, I chose to rent the number one bike in the world. The ride brought me an immense amount of personal joy and freedom. I love to ride and I was doing something memorable. Also, as I shopped in the Harley dealership showroom, I was reminded why Harley is the world's most loyal brand. Did you know you can buy a leather sofa and love seat combination with the Harley Davidson logo imprint on the leather? You can also buy everything from bar stools to belly button jewlery with the Harley emblem on them? Is it practical, reasonable or rashional to buy goods with a motorcycle logo pressed on it? Logically, no. However, the perception of Harley Davidson is an expression of personal freedom and individuality. That is why it has such loyal customers. What are you doing to make your customers loyal? Here is a list of the top motivations that get people to buy. 1. There is a genuine urgency of the situation. If your house burns, you have an immediate need to get help to repair it. If you have a nagging toothache, you have an urgent need for a dentist. 2. Their is a perception that your customer needs what you have. Do you have high speed internet? You don't really need it, do you? Or do you? Life was cruising along just fine without it. However, when you finally invested in high speed internet, you justified your need for it. 3. Your customer has the 'wantsies'. Desire is a huge motivation. Most of your customers just flat out want what you have. In reality, they could do without it. Your job is to nurture their desire. 4. Making your customer feel important or significant when they use your product is a big motivating factor. To be known as a person who must have the newest, the best, the first, or owns something rare is gigantic leverage for some people. 5. Sometimes your customer needs effeciency. It is a fast paced society. If you can prove to your customer that you will save them time and effort, their perception of the effieciency of your product is elevated. 6. Every customer wants to be right when they make a buying choice. Validation is a key motivating factor. Help your customer prove to themselves that they made the right choice when they bought your product or service. Here's the secret. Your customers have all of these motivations. The more motivating factors you satisfy, the more money you can charge for your product. The perception of value is bigger. That means more money for you. What part of that do you not like? As you can see these motivations can be satisfied with the perception you create with your product or service. Take a hard look at your product or service. Look way beyond the price that you are currently charging and do what it takes to charge more. One final note. When you charge more for your product or service, your customer percieves that there is more value to them. Don't let them down. If you do let them down, you will have to go back to selling your product based only on a cheap price. I hate it when that happens. Till next time, take care of yourself and your loved ones.
PS. Please check out my brand new book, Profit Power. It will change the way you think about your business. |
January 30, 2004
"101 Power Strategies"
"America's Construction Industry Motivator" |
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