In this latest article in the series on competing on price, we look at a great question to ask your customer. It takes confidence to ask, but if your stuck in a price battle, it can help to get the discussion moving. To see the start of the series of articles, click here.
Customers often know who they’d rather deal with. They’ve sometimes made their mind up early in the buying process, but they might not tell you of course!
If you are being asked to reduce your price, you could ask your customer: if we were the same price as our competition, who would you prefer to buy from? And why is that? It’s a great way to understand your customer, what they really want and what matters to them. And, it’s a good way to get them to reinforce to themselves in their own words what it is about you they like. They may not tell you of course, but there is no harm in asking.
If you are more expensive but they prefer you, you now at least have a basis for a conversation. If you are £20 more expensive, you have a chance of justifying the additional £20, because you know deep down they want to buy from you. So there is a fair chance the customer is trying to justify it too. If you don’t ask, you can justify your price gap as much as you like, but you could be wasting your time.
In the course of the conversation that follows this question, you could also learn the point at which they would buy from you.
There are a couple of other interesting points here:
- If they buy from the competition at £90, and the product or service turns out not to be good enough, they’ve wasted £90. If they buy from you at £100 and your product is what they need, then at worst they’ve wasted £10.
- And there’s an old adage that goes something like this: “Product, Service, Price. Which two do you want, Mr Customer?” Take a moment and apply this to almost any product you can think of. Few businesses offer all three. Look at Mercedes – great cars and great service, but hefty purchase price. Take easyJet, usually a good price, and a reliable product, but don’t expect five star service.
Most people know you don’t get something for nothing. You get what you pay for.
Take action: Ask your customer if prices were the same, who would they rather buy from. Why is that?
Coming next….look at what you do really well.
If you’d like to contribute your thoughts on this topic, then we’d love to hear from you. Please post a comment below.