Quiz: Which Pricing Strategy is Best?
Here's a real-life problem sent in by a Sales Machine reader.
SCENARIO: You're selling software to utility companies, most of which are government agencies. To be profitable, you must sell your core product for around fifteen hundred dollars per copy. When you talk to prospects, you want to quote a price that will move the sales process forward.
Which pricing strategy is best?
- Strategy #1: Quote them $1,500. CLICK HERE
- Strategy #2: Quote them $1,495. CLICK HERE
- Strategy #3: Quote $1,600 then discount. CLICK HERE
You picked: Strategy #1.
CORRECT!
When a prospect is relatively sophisticated (as in most B2B deals) playing psychological games with the price is usually wasted effort.
However -- and this is important -- I hope you're not talking price up front.
It's usually wiser to suspend that part of the discussion until after you've uncovered an overwhelming need for your offering. For more on how to do this, see: "How Much is Your Solution Worth"
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You picked: Strategy #2.
WRONG!
While it's true that consumers are more likely to purchase a product if they perceive it as not passing a certain price barrier (hence $9.99 for a ten dollar product), we're not talking about consumers here.
In fact, the "K-mart" pricing is a subtle indication that you're not being completely honest and that you think the prospect is not very bright.
What's more, there's always a danger that you'll accidentally slip and say "it's only fourteen ninety-five" and the prospect will start thinking "$14.95", which is whole 'nother ball of trouble.
CLICK HERE to try again »
You picked: Strategy #3.
WRONG!
Offering a sudden discount early in the sales cycle signals to the buyer that you're playing games.
It's much better to give a firm price, and then hold onto it.