Customers have learned they can ask you for a lower price andoften get it. If you don't offer some kind of concession, a bigpercentage of your prospects will move on to another business whoWILL give them a price cut.
Price cutting is more prevalent in some industries than others.I wouldn't dream of asking my doctor to drop his fee for anoffice visit, but I wouldn't think twice about asking thesalesperson at the car dealership if they could knock a fewhundred off the sticker price.
How do you drop your price without losing your profit? I mean,lots of sales are good (which you're likely to get if you dropyour prices), but lots of sales that don't make a profit willbankrupt your business in a hurry. Here are a few tips:
1. If you recently dropped your price, point out that cut to thecustomer, then give her an additional 10 percent reduction. Notethe total amount she is saving over your old price. When theeconomy is tightening and prices are dropping, this strategy canwork well for you.
2. Vary the amount of price concessions. If you give thecustomer a $20 price cut, don't give her an additional $20 pricereduction the next time she asks. Your customer will immediatelyfigure she can ask a third time and once again get an additional$20 off. Instead, make your second price reduction $15 or $10.This tends to stave off additional requests.
3. Most times, you already know how much you can drop your pricewithout even being asked. Don't give the customer your fullprice cut the first time. Instead, offer them a smaller cutfirst, then give a little more if they ask for it.
Many customers may not expect a huge price cut, and will behappy with what you offer them. They simply want a sinceregesture that you are willing to deal.
4. Don't keep changing your firm offer. I saw a business persontrying to sell a computer to a customer who seemed on the brinkof buying. "OK, if you buy right now I can take $100 of theprice but that's as good as I can do," he said.
When the customer still seemed reluctant, he added, "OK, if Italk to the boss we can make that $250 off, but that's all we cando."
I could see the light in the customer's eyes. She knew she hadthe salesman on the ropes. She realized his final offer was farfrom final.
All this is contingent on your having a pretty good profit marginbuilt into your products or services. If your business runs on avery tight margin, you may not be able to make any concessions onprice.
Instead, offer an additional free or low-cost service. Providefree advice after the sale, an attractive guarantee, oradditional bonus items you get or give at very low cost to you.
Frankly, if your price is already among the lowest, you may notneed to drop it further to get sales from those who mightotherwise want a price reduction. Simply point out how yourprice is already lower than what competitors charge, for a lot ofpeople, that will be enough.
Many customers automatically assume that you're not at yourlowest price. By showing them you have already made strides tooffer very attractive pricesBusiness Management Articles, customers will often drop thesubject of a price reduction and buy without haggling.
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