A killer sales team needs a killer sales strategy to really bring in the revenue. A typical component of that strategy for companies – especially retail or SaaS – is to begin the pricing portion of sales calls with a list price. Many sales trainers think of this approach as a positive way to invite negotiation or convey a sense of exclusivity when they offer their prospect a better deal. Yet, according to Vanessa Nornberg, Birthing of Giants Board of Experts member and owner of Inc 500 winning company, Metal Mafia, “list price” is the same thing as saying “sucker price,” Here’s why.
List Price Sends the Wrong Message
As Vanessa indicates in her column, the moment an experienced customer hears the words “list price,” they instantly know that your product is worth less than what you’re initially asking for it.
“List price means you want your customer to have to haggle with you, but more importantly, it says that your product is not really worth the full price you’re asking.”
Is that truly how you want your customers to think of what you’re selling? Consider the message you’re sending about the value of your product. Remember always that if your sales team is successfully conveying value, then price is much less of a sticking point.
Tiresome Haggling or Settling for a Rip-Off
Another point that Vanessa advises you to consider is the emotional impact that list price will have on your prospect.
“It signals that the customer has to either sacrifice his time to push for a fair price, or resign himself to being overcharged in order to move on with his day.”
List price essentially means that there’s not one price for your product. There’s a spectrum of prices. Your customer will automatically think of the list price as the rip-off price, and either haggle for a better deal (not usually a pleasant experience), or resign themselves to paying too much. Again, not a good message.
What To Do Instead
The best way to close deals and retain customer loyalty is to deliver a great product AND a great experience to your customers. A better strategy than using a list price is to use the right price for your product. As Vanessa describes:
“Make it clear to prospects walking through your door that they have come to the right place–the one where they can find the right product at the right price.”
You can read Vanessa’s article in its original form at Inc. Magazine’s website.
Article originally posted on birthingofgiants.com
Lewis Schiff is the author of Business Brilliant: Surprising Lessons From the Greatest Self-Made Business Icons, the executive director of the Business Owners Council and the co-founder (with Norm Brodsky) of BEN Global Mentorship that helps business owners transform their companies into scalable enterprises and, eventually, enduring institutions with help from rockstar entrepreneurs from around the world.