Start by thinking about how much YOU charge your customers.
When people say to you, “How much do you charge?” … Well, are you a little nervous? Are you embarrassed?
I’m always nervous when PRICE comes up.
Because my prices often start at a $1 million.
So just imagine when I first got started … how un-smoothly this “price conversation” happened …
BUYER: “Oren, it all sounds good, but how much is your service”
ME: “Oh … the cost? well, glad you asked … it’s about ONE MILLION.”
THEN I immediately changed the subject …
Because my “price” was 10X more than they “thought” it would be.
Even the billionaires I deal with don’t like to pay this much …
Anyway, I don’t have this problem any more.
Today, I don’t go near the subject of price … until I re-frame the competition.
Competition is a way bigger issue than “price.”
Oh, and by the way, YOU think you have a lot of competition?
HA. I LAUGH at your competition.
Come work with me for a day.
I’ll show you what it feels like to have COMPETITION.
…. you know that kid who graduated from Stanford last week?? Well, he says he does exactly what I do (only much better.)
Also, JPMorgan and CreditSuisse say they do “the same thing” as I do.
AND so do half the people on Upwork, Fiverr, ZipRecruiter…
… and so does some dude on LinkedIn named “Lucas” from Brazil … he also does “the exact same thing as Oren.”
Completion and Price are tough obstacles.
THIS IS WHY you might want to copy what SNAP-ON does to re-frame the competition and price their products at 15X…
I copied them and it worked perfectly:
FIRST, Anchor your price HIGH Because Price Is A Strong Signal of Product Quality.
You know the story:
- A $10 wine is a good value, but it probably won’t taste very good.
- $20 wines probably taste pretty good.
- $70 is expensive, but I’d buy one for a special occasion.
- $240 wine? Congrats, I won Dad of the Year … again! 🙂
In other words, your price is a PROXY for how good your product is.
SECOND, You Should Actively Avoid Negotiators, “Debate-Club-Heros” and price-shoppers.
If the Buyer keeps bringing up price one, two, three and four times… DUMP HIM.
I’ve never seen a REAL BUYER hammer away on price when the other terms were great (financing, services, delivery, guarantees etc.)
You need to find out quickly if a Buyer thinks it’s “ok” for you to make money on the deal.
If he literally does not want to take money out of his bank account and put it in yours … dump him.
THIRD, it really matters WHEN you introduce price.
This is a tricky subject – because buyers want to know immediately “how much is it?” So should you cover price in the beginning, half-way through, or at the end?
Think of it like this
1. You should Reveal the Price (or valuation) as the very last discussion item in the meeting.
2. BECAUSE, as soon you disclose the price, they are gone.
(Oh, they might still be on the phone or in the meeting, but they are not paying attention, instead researching other options and trying to validate your pricing.)