How To Sell Overpriced Services
A reader writes:
I am an MBA who has been working in the web design industry for more than 2 years and have always surpassed my monthly targets. I recently joined a new company. We charge four to six times the normal market price and building a website takes twice the time my previous organizations took. Since joining, I have contacted many clients but have lost all but one client on price.
It is not just me; all five sales reps are encountering the same problem. We try our best but prospects simply run away after hearing the price. I've gotten some emails saying we were not shortlisted because our price was too high, even though they liked our work. I showed the emails to my boss, but he is not willing to come down on the price. What's your advice?This sounds like a problem with your management, but the real problem is in your sales approach. You're trying to sell based upon the reality of price rather than the perception of value. Here's what you need to do:
- Upgrade your Appearance. Buy yourself the highest-quality, most expensive suit that you can find. Get yourself a fabulous pair of shoes and an expensive watch. Buy silk underwear. Get a $100 haircut, and a manicure. The top-to-bottom makeover is absolutely necessary because when you're selling something overpriced, you've got to look and feel successful. In addition, buying top quality reminds you that the BEST costs $$$$$.
- Reframe Your Value Proposition. Some people are willing to overpay in order get what they perceive to be the best. You are the BEST. How does the prospect know? Because you're better dressed than the competition. Your firm is the BEST. How does the customer know? Because you charge more than the competition. Your firm is EXCLUSIVE. How do you know? Only the best can afford to hire you.
- Surface the Price First. When you initially contact a customer, tell them right off the bat that your firm is significantly more expensive than the competition. Tell them that there's a reason for this, but that you want them to know that YOU are not interested in getting involved with a customer who's looking to cut corners. Tell them that if they want a cheapie website, you'll be happy to recommend a cut-rate firm that does adequate work.
- Sell the Differentiator. Once you've planted the notion that they'll be slumming if they go to a competitor, explain that your services are more expensive because you only work with a small number of clients and spend extra time and energy on each site that you build. Explain that that the top quality appearance of your sites is matched by the effort your firm lavishes on the back-end programming, which is where your so-called "competitors" skimp.
- Never, Ever, Discount. By doing the above, you've linked a high price with quality work in order to create a market differentiator. Because that's your competitive advantage, you must never discount. Not a single cent. Ever. Will you lose some business? Sure. Will some prospects choke? Absolutely. But the business that you do land will be highly profitable and your customers will be happy because they'll know they bought the BEST.
UPDATE (7/7): A discussion of overpricing as a competitive strategy can be found in my post "High Price CAN be a Competitive Advantage."