Have you ever heard the following from a customer…?
- I can’t afford this.
- Your [product/service] is out of budget.
- You are too expensive.
- I’m going to go with a cheaper option.
If you’ve seen or heard any of these, then this post is for you.
Here are the sobering, heart-stopping truths about price psychology…
Truth #1: Price issues are never about price.
When I first started freelancing, I had a hard time selling myself. I kept getting caught up in the usual things that tripped me up… namely, I kept focusing on me and my skills, my experience, my background.
Thing is… no one cares about that.
No one cares about me personally. They don’t care how I do my copywriting, or what I used to train for it, or any of that stuff.
They don’t care about the technology.
They don’t care about the tools you or I use.
They don’t even care about the superiority of a method.
Your customers only care about how wonderful their life will be once their problem is solved.
The only thing your customer wants to be sold on is how great their life will be post-solution. They don’t want to know how you did it, really. Even if they’re buying a how-to guide, they don’t want to hear you talk about how you produced that lead magnet using a voice-to-speech software and then published it via a premier publishing company and then shipped it via Samcart. They don’t even care if it’s 30 pages or 150. They want to know how well whatever it is you’re offering will tie into their results.
There are three things you must prove:
- You are trustworthy
- You understand their problem exactly
- Your service / your product can solve their problem better (read: faster, more ROI, less work) than doing nothing, buying from a competitor, or doing it themselves
So if your entire pitch was about you…
…how you would technically execute the solution
…your years of experience or certifications
…how much passion you have about the job
Instead of about your prospect’s end result…
…the kind of life he will live using your product or service
…how easy he would solve his problem using your service (as shown through testimonials)
Then you are likely losing sales.
Truth #2: There are three reasons people use price as an excuse
There are only three reasons that people have when they use price as an excuse.
Reason 1: They cannot actually afford your service.
Sometimes, people will look into your service because they do have a problem, but they’re still in research mode.
They don’t know anything about you or your price or what you do.
Sometimes they’re just looking.
They may not be ready to buy. So if they say they can’t afford it…maybe they literally cannot afford it.
Or maybe, they’re not your ideal buyer.
If you’ve built out a buyer persona and you’re targeting a specific customer, then your price will fit that buyer persona. By definition, a person who cannot afford your service is not your ideal buyer. Period.
Stay top of mind with this person (through retargeting, lower-price hands off products, and regular email marketing) but DO NOT lower your price because then you’re lowering your value.
They will not value you more because you gave them a discount.
Therefore, do not lower your price to win a sale.
If you really think this project or customer is a good fit, the best thing you can do is to continue to offer proof.
Offer hope that will get them thinking about their life after hiring you. Plant that seed.
Let them see your product as a sure investment in their future.
So let’s say someone cannot afford a product, but you know that they will make the money back quickly. If you can absolutely guarantee that they’ll make money, make sure that you’re reducing their risk so it’s a no-brainer that they will no matter what make that money back very, very quickly.
Make sure you’ve highlighted your guarantee. Offer them payment plans.
But don’t ever, ever reduce your value by discounting.
Reason 2: They do not value your service or the end result.
Some prospects want results without investing anything. They expect the moon but don’t respect your time or expertise.
These prospects haven’t done their research about what you do or how you help.
They don’t know how much work it takes to become an expert in [whatever you do] like you have.
They don’t know (or care) how long it takes you to do what you do.
And they certainly don’t want to invest in their own end result.
So they want to 10X their income but don’t want to put in the 10% it’d take up front?
In my mind I’m pretty sure they don’t want it bad enough.
Let’s take a look at my own story, shall we?
So far I’ve invested $25,000+ in my copywriting training, in website building, books, etc. My mission is to make millions for my clients. Is $25K worth what I will be able to make my clients with that knowledge? Hell freakin’ yes.
Your prospects should be the same way. If they want the moon, they better be willing to pay for a rocket ship.
If you see these prospects…RUN.
These types of clients and customers are terrible.
- Will question you constantly
- Will redo what you’ve done or disrespect your time and effort
- Don’t actually know what they’re talking about but will talk down to you anyway
- Will ask for refunds unnecessarily
- Will complain constantly about the very things others gush about
- Won’t recommend you to others or provide a referral
The best thing to do here is not sign them up.
And if you can, figure out what attracted them in the first place and disqualify them faster and earlier in the sales process.
Reason 3: You have not proven how what you do ties into their results and how it’s worth what you charge.
The good thing about reason number three is that it’s in your control.
Unlike the other ones which rely on your prospect, this one you can fix.
So if you’ve built a buyer persona and know your prospect well…. You shouldn’t have this problem.
If prospects who have the budget and value the outcome are not choosing you it’s because you haven’t sold yourself well.
What do you do?
Go back through all of your sales materials, your website, and your proposal and pull out every selfish, I-focused bit. Pull out all the feature-only content and rewrite it so that every “feature” has a so what attached to it.
Because remember, people buy for emotional reasons and justify with logic.
Honestly, this is why copywriting is so freaking hard and is so expensive.
Copywriting which pulls the emotional strings and sells without turning someone off is very, very difficult.
Truth #3: Price is a marketing strategy, so use it like one
Your pricing tells the world more than you think. It tells the world what you think of yourself. And it tells the world who you help.
First, pricing tells the world what you think of yourself
If you believe actual core that what you do is valuable and will benefit your customer then it is your obligation to sell it and if you believe that what you do is valuable and you will charge a price that is commiserate with that value when you charge to low you’re saying that you don’t believe that it’s any good.
Second, your price tells the world what you think of money.
If you’ve never made more than $1000 a month in your entire life, you’re going to feel shame selling a product or service for $1500 or $3000 or $10,000. Have you only made $250,000 as an entrepreneur? You’d likely choke at pitching a $350K project.
Your price reflects your own inner barriers if you let it.
This is why most of the top names in the industry raised prices incrementally….
…and also why each of them will recommend mindset books such as “Think and Grow Rich” and what-not to new followers.
Your mindset is everything.
Pricing fails happen when you get stuck on yourself.
Most people price to please themselves instead of the prospect.
Let’s say you sell to enterprise customers:
Do you think a company like Microsoft or Dell is going to take you seriously when you charge $150 per white paper…. Instead of the $1500-$7000 the industry charges?
Or $15 per hour to consult on business marketing?
The answer, of course, is no.
Your client knows that if you really understood the market….
and really understood the amount of work it took to produce a white paper….
And you really knew what a good white paper could do for a company’s lead generation efforts…
That you’d charge a good rate for it.
While you personally might not be able to afford to hire someone at $3000 to write a lead magnet, it doesn’t mean that your prospect can’t.
By focusing on you and your limitations instead of who your prospect is, what their budget is, and what their expectations are, you are missing out.
Your pricing must reflect the your ideal buyer’s expections.
Note, that you won’t meet everyone’s expectations. You shouldn’t!
Your goal is to sell someone very, very specific buyer a very specific outcome. That outcome… that happiness… has a price tag.
Find it, prove it, and then own it.
Remember, your price is not about you.
Third, your price tells the world who you help.
Let’s go back to the example of Microsoft. If you are a white paper writer, your market is pretty wide. Companies of all sizes need white papers written:
- Small startups just barely launched
- Enterprise IT companies who make millions in revenue
- Software Development firms who’ve been in business for 25 years
Now, if you price at $10,000 white paper you are essentially saying that you only work with clients who have a big budget and who get big revenue out of the lead magnet that you generate. You’re also saying that you’ll only work with clients who deeply value and need what you produce.
See how that works? It’s not about how hard or easy it is for you to write it.
It’s about the results and how your customers perceive you.
Your price should be one way that you disqualify bad leads so you can qualify good ones.
Your price is a marketing strategy. Use it as such.