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How to Sell More Without Cutting your Prices

How to Sell More Without Cutting your Prices

December 19, 2008

4 tactics to help you build more value so price isn't even an issue

 

Read the headlines and it would seem that the only way to sell something right now is to price your product lower than everyone else.

No wonder we're seeing companies laying off workers by the thousands while others are shutting down completely. There's much more to pricing a product than just coming up with the lowest figure. Unfortunately, very few companies - even those with millions of dollars of resources at their beckon call - haven't learned how to price their products.

There are 4 important tactics to creating value in your product. And the price you charge is only one of them.

Tactic #1: Packaging - It's not butter; it's margarine

The first element of creating value - and one of the most overlooked - is the packaging of the product.

Take margarine for example. Louis Cheskin, a giant in 20th century marketing and packaging, salvaged margarine from the trash bin of ideas. How? He repackaged it in foil and made it yellow so it looked more like butter. Until he came along, they tried and tried to sell the unappealing butter substitute but failed. Everyone recognized butter as yellow - so a butter substitute had to be yellow too. (By contrast, remember green ketchup? That was a bad idea.)

Cheskin coined the idea of 'sensation transference', which means that people, on a subconscious level, don't make a distinction between the package and the product. The packaging is innately part of the product.

Take 7-Up as another example. The sales team was shocked that their sales dropped - and they didn't know why. The marketers of 7-Up tested several different packages and fiddled around the coloring of the can. If they added 15% more yellow, people in taste tests reported that it tasted too lemony. Add 15% more green, and it had a lime flavor. It was the same soda. The recipe hadn't changed at all but the perception had changed with the packaging and they found they were losing sales because the packaging made it seem too lemony! It's ironic but true!

Takeaway: Take a look at your packaging. What does it say about your product? What perception do you want to leave with your customers?

Tactic #2: Pricing - It's all about perception

Bear with me here because I get so frustrated when talking to business owners about how they come up with their prices. They either begin to tell me about how much the product costs them to produce or they tell me about what their competitors are charging ' or they tell me about both. By this time I'm looking for something to punch!

Your pricing has very little to do with your costs or what your competitors are charging. It's all about the value in the minds of your customers! Imagine you're selling software to help businesses manage their employees. You may sell it for $89. But you can take that same software and customize it for very specific industries, such as consultants. You can add templates with the proper legal disclosures for hiring freelancers, give specific guidance on the laws regarding work-for-hire contracts and how it may vary from state to state; you could create sample hiring documents, add a website for customers to download forms and provide answers to questions while on the road, add an online questionnaire, etc.