Conflict Resolution: How can we be both too expensive and too cheap?
I’m in the midst of a Win-Loss analysis project for a client. Lucky me! It’s one of my favorite things to do, and while I wouldn’t quite do it for free… As always - it’s been really interesting to speak with customers, as well as with the ones who got away.
I focused on the Win side of the equation first, and time and again heard from recent buyers that, not only is our product great, it was so inexpensive when compared to the competition, that they couldn’t help but buy it. How nice to learn that price was a ‘delighter’ - and maybe even that we just might be leaving some money on the table.
Last week, I started working the Losses.
As much as I love the Wins, I love talking to the Losses even more. You can learn things that you’ll never hear if you stay in the Happy Valley of the New Customers. You learn more about missing features, misfiring processes, misinformation passed, mishandled sales….Ouch-ie, yes, but it’s information that you can use to help change things around to ensure more Wins - in a way that you’ll never get to if all you do is bask in the win analysis love glow
The Losses I’ve been speaking with have fallen into two camps: no decision (yet), and loss to a competitor.
What’s been most surprising to me is just how many of those I’ve spoken with who have mentioned how EXPENSIVE the product is.
Say what?
Here I was one step short of recommending a price increase, only to hear that a lot of those who like the product find it way too expensive.
Anyway, I still have more work to do - and a lot more Losses to run through - but I’ve already begun comparing and contrasting those who thought the product was almost ridiculously cheap vs. those who found it cost way too much.
I’m trying not to jump to any conclusions - been there, done that - but a couple of patterns are emerging.
These patterns may help us decide whether there are certain markets we want to avoid - or whether we want to come up with a streamlined, limited feature, less costly version for that group.
I’ve always found setting pricing the hardest thing that marketing has to do.
And no wonder!
But it sure makes life interesting.
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Maureen,
A very interesting subject, and I’d imagine we’ve all been there. And I think your first option–selecting your prospects more carefully–is better than your “services light” second option. (THAT only gives the prospect who does value you a lower entry point, while the tire-kickers will still think its too expensive.)
I guess it’s like life; different people value different things differently. I remember an acquaintance who took his wife out for a big anniversary dinner–to Ponderosa. To him, the perceived difference between Ponderosa and an upscale place just wasn’t worth the cost. Some of us might feel differently.
Even if you DO get somebody to stretch up to what THEY regard as an inflated number, you will be made miserable in the course of the project. Value = respect = good working relationship.
The things we do, from management consulting to copywriting to whatever are simply NOT commodities. If prospects don’t understand the difference in price, they obviously can’t recognize the difference in quality as evidenced by approach, content, or track record. Trying to teach them is more trouble than finding a new prospect! That’s not arrogance, it’s just reality.