Why You Should Never Lower Your Prices

This is going to be a short article.

Because this lesson is not one which will take you long to learn.

Here it is:

Never lower your prices.

This goes against what most people believe when it comes to business.

Surely, you should lower your prices whenever possible.

People are only motivated by price,?right?

Wrong.

Some people are only influenced by the cost.

But if you’re offering a valuable service, you don’t want those people as customers.

Clients who understand the value you’re providing want 2 things:

- To free up more of their time.

- To get a return on investment.

If your services are cheap, you prospect isn’t going to take you seriously.

Because whether you like it or not, perception is everything.

Let’s take an example in the real world to illustrate my point.

I live in the United Kingdom.

There are many different supermarket chains here.

They sell different products, at different prices and serve different customers.

Each brand has it’s own perception among the public.

Which ones do you think have the worst perception?

That’s right, the cheapest ones.

- The cheap ones sell the worst products.

- Are in the worst parts of town.

- Attract the worst customers.

Which ones have the best reputation?

The expensive ones.

You need to be conscious of this.

If you pride yourself in offering the cheapest service on the market, think again.

No client wants to have the cheapest service provider.

On the flip side, the client with the most expensive service provider feels a sense of status.

They can afford to pay for the best, because they are the best.

If everyone can afford you, you’re never going to attract the best.

Here’s my exception to the rule:

You can lower your prices if you’re Tesco, Walmart, or Amazon.

Don’t you dare lower your prices if you’re a service based business.

Here’s why:

People aren’t buying your service because it’s the cheapest.

People do not want cheap.

Cheap sounds bad.

It has a negative connotation.

It leaves a bad taste in your mouth.

Cheap = Poor quality.

Why?

Because most of the time it is.

Never strive to be the cheapest service provider in your market.

You’re not going to make any money.

And your clients are going to think your work is terrible, regardless of the results you produce.

Let’s look at 2 online marketing agencies.

One of them is brand new to the game.

They’re nervous about getting their first client and want them to say yes by any means necessary.

They know the service they’re offering is valuable.

They also know that their prospect needs what they’re offering.

But they don’t believe in themselves yet.

So, they lower their prices, thinking this will influence the prospects decision.

What happens?

The prospect becomes suspicious.

- Why is the service so cheap?

- Every other agency I’ve spoken to has quoted a much higher fee?

- Do these guys know what they’re doing?

These questions would never come up for an expensive agency.

Only cheap ones.

Now let’s look at an advertising agency that already has a couple of clients on the books.

They’ve been able to deliver good results and are confident in their abilities.

On their next sales call they decide to increase their prices.

Does the prospect say yes immediately?

I wish!

There are always going to be questions in a negotiation.

You’re very rarely going to have a red carpet sales call.

Remember, sales is all about building trust.

Trust can take time to build, especially when you’ve just met.

However, the questions in this prospects mind are completely different from the questions raised in the other example.

Instead of thinking, do these guys know what they’re doing?

They’re thinking:

- Can we afford to do this right now?

- Do they offer a guarantee?

- What are their results?

These are fair questions.

Which questions would you prefer on a sales call?

The latter, of course.

Here’s another benefit to being expensive:

Your clients will let you get on with the task!

If you’re cheap, they’re going to be asking you to change things all the time.

They’re going to question your angle.

They’re going to make you rewrite the Call To Action.

They’re going to make your life a living hell.

Being cheap is an absolute nightmare.

Contrastingly, if you have an expensive service:

A) Your client is going to be too busy to check up on your progress.

B) They’re going to assume you know what you’re doing.

Why?

Because you charged what your service is worth!

It’s that simple.

It doesn’t matter if you were Gary Halbert.

If Gary wrote a sales page for $100, he’d be read the riot act after every draft.

He wouldn’t get anywhere.

But Gary didn’t charge $100 for a sales page.

He used to charge between $30,000 — $50,000 for a sales page.

And his clients wouldn’t bother him at all.

When you’re expensive, you’re perceived as an artist.

When you’re cheap, you’re perceived as a beginner.

Or worse, a scammer.

It’s sad, but true.

Here’s the lesson I wish to impart on you today:

Don’t decrease your prices.

I hope you found this valuable.

If you need any help maximising your marketing potential, message me at Finlay Godfrey

-Finlay