This week I was reminded about the perception of value. A friend of mine runs a new and thriving consulting practice and he reached out to me asking what I think he should price a new service at. Before I could answer he told me what he thought he should price it at.
I was blown away.
Not by how much he was pricing it at, but at how little. He had made up his mind that he would price his service at a price that was well below what the market would bare. I thought and think that he is pricing it ludicrously low. So low that I believed, and still do believe, that it will damage his brand that he has worked so hard to build. Which is a brand of value and trusted expertise.
When I probed and asked him why he chose that price he told me that he just didn’t think that specific target market would pay that price for that service. He went on to say that it was a service that no one else offered and hadn’t been tested in the market, so how could he possibly charge more for it? Fortunately for him, I understand his market very well and I have a good understanding of what the market would bare for the new service he is going to offer .
Side Note: No one offers the service, not because there’s no value in it, but because there’s so few people on the planet that could actually pull it off – he is one of maybe a handful of people that could.
I probed further, “So do you think that this service is not value added?” His response took me by surprise, given what I know about him. “No, I just think that it’s too expensive.”
The response I gave him (which wasn’t my best coaching moment) was, “Are you insane?!?”
And then I was reminded of a piece of wisdom that was shared with me by a mentor of mine:
PRICE RESISTANCE STARTS WITH THE SELLER.
If you believe that the value of the service or product you’re offering isn’t worth the price it should be priced at or what the market is willing to pay, you will inevitably price it lower than you should. And even if you price it at the right price, the likelihood of your providing unnecessary discounts increases substantially.
Remember, perception is everything. Not just the market’s perception, of course, but your very own perception as well. If you perceive the value of your product or service to be lower than what it’s priced at, then the likelihood of seller concessions increases substantially.
There’s a lesson in this for all sales people. If you don’t believe in the value of the product that you’re selling, stop selling it. Find something else to sell. You will not be successful if you don’t believe in the product or service you’re selling. Not because of some metaphysical reason around belief (although there’s a lot of truth in this), but simply because you become more likely to lose sales (over loss of enthusiasm or disbelief) and offer discounts where other would not. And by doing so, you are literally creating a warm safe space for your competitors to come in and steal all of your business.
If you don’t believe in and are not enthusiastic about the product or service that you sell, why should anyone else be?
Remember, as a sales person, price resistance begins with the seller. If you can’t convince yourself of the value of what you sell, how are you going to convince others?
If you’re in this spot right now, give your head a shake and make a decision. Either change your belief on the value (and do a stack of research to enforce that belief) or find a new product or service to sell. Don’t sit on the fence of mediocrity and continue selling something you don’t believe in.