Things only have the value that we give them. MOLIERE
What is internal price pressure?
It’s when you’re so motivated to make the sale, close the deal or keep the customer, you:
- Sacrifice profits completely
- Reduce your profit margin by some percentage
- Cut your price in advance of customer price resistance
- Cut your price in response to mild questions or minor pushback
- Promise top-quality products/services at bargain-basement prices
- Absorb costs rather than increase the overall price
- Volunteer to deliver more products/services in a shorter timeframe with no price adjustment
- Agree to deliver rush-turnaround products or services without any increase in price
- Bundle low- and high-profit products as a package deal (guess which one will be canceled in the future?)
- Run specials or slash prices to boost short-term cash flow
- Sell a new, innovative or high-value solution at commodity prices
- Focus exclusively on price (rather than quality, value and solutions)
- Refuse to walk away, in spite of all the warning signs
- Let the customer dictate the price, and you simply comply
- Implement across-the-board price cuts to jumpstart sales
In the face of immediate price pressure, it’s a challenge to remember we control our own pricing strategy and structure. The customer does not.
While we might choose for various reasons to move prices or up down, this decision is ours, and ours alone. The customer doesn't dictate our prices, we do.
While we might choose for various reasons to move prices or up down, this decision is ours, and ours alone. The customer doesn't dictate our prices, we do.
In other words, things only have the value we give them.
The best antidote for internal price pressure, therefore, is to sell value, not price. This means we must know and believe in our own value and communicate it in a way that is meaningful to the customer. And ourselves.
Yes, I know, that's easier to say than do. So, the price pressure dialogue continues.
UPDATE
Check out our two new tipsheets: Price Pressure | External Forces and Price Pressure | Internal Forces.
Related
Price Pressure | External Forces (article)
Price Pressure | Self-Inflicted Wounds
Price Pressure | Death by a Thousand Cuts
