The Business Relationship Building Blog
Mar 01, 2017
Working with our potential customers is something we must do before we make them our customers. Sometimes when we make the decision that we and our products need to be discounted. When we discount a product to often or to steeply, we are telling our potential customers that we are not good enough to pay full price. We are saying that we lack the quality that a full price service or product would command.
I don’t think there is anyone that wants to discount their products or services. We all want to do our best and to be paid properly for it. So why do we discount?
The reason is simple. It can be summarized in one word: Fear. Every being on this earth can sense fear. From lions and lambs to every person ever born. The difference between the predator and the prey is the attitude. I have seen 10 year old girls manage a 1,000 lb. horse despite the obvious difference in size. The reason this occurs is due to the level of confidence that the little girl has.
The confidence comes from experience. For many of us who haven’t tasted the levels of success wed like to attain, this experience we need is sometimes hard to come by, especially when many of our experiences with success have been sporadic and or short lived.
When I was younger and I needed a tool but I didn’t have the money to go out and buy one, I would borrow it. When we lack the confidence needed we must borrow it from others. The trick is we can only borrow it from someone who possesses it themselves.
The internet has made it easier to find these people, but it also offers a problem. As successful people are more accessible through social media, I have found that the pretenders have more access to us. We have to be very careful of whom we borrow our confidence from because often its false confidence or sublet as they are borrowing it from others who actually have it.
When it comes to pricing lets look at companies that don’t feel the need to constantly discount. What are the take aways? Pricing a product has nothing to do with exclusivity, quality or value, it has to do with perceived value, perceived exclusivity and perceived quality.
Lamborghini sports cars are only rare because the company doesn’t make a lot of them. They could make more anytime they feel like it, but the perception is created that they are in fact rare, similar to gold or to beachfront real estate, things that are actually rare.
Lamborghini’s traditionally are not reliable yet they remain a very desirable car that commands premiums in the new and preowned markets. The perception is the key. Some people may believe that this principle only applies to high end luxury goods. Lets look at a my own product, Mission Belts. $34.95 will buy you a really well made solid belt that will always fit right. We never allow retailers to discount our products. They sign an agreement when they open the account with us and we enforce it. We have a few sales online each year but its usually Black Friday or a specific color like pink for breast cancer awareness.
This principle can be applied to any product and any service. Look at the brands you admire. Borrow their confidence and strategies and price your own services and products accordingly!
You can do this!!