The Art of Setting Price – Part 3

In part 2 of this series, we talked about finalizing the prices you will charge based on the data you’d collected,  and how to communicate those prices to your customers.   There are some customers who will accept the prices you give them without an issue, thinking they’re fair,  there will be some customers who think they’re getting a bargain,  and there will be some who will always want to argue the price or who will press for something extra.  How you deal with the latter group may be the difference between a business that makes a profit and one that soon sinks out of sight.

So,  how do you deal with those people who want to argue or negotiate price?  One way is through education.   A lot of people don’t know what goes into making a shirt or a transfer or a hat.  Show them the process.  Show them the machines you use to do the work.  Talk about the supplies you buy,  the webinars you watch and the seminars you’ve paid to attend.   Let your customers know that you’ve invested a lot of time and effort into being good at what you do.   People are always more comfortable about and more willing to compensate experts for their time and expertise.

Another technique is to try to get to the “why” of their objection to your price.  Are they operating on a budget that may be unrealistic?  Do they not understand what goes into making the goods they want to buy?  Did they find someone down the street that offered to do it for cheaper?   If you can find out why they’re objecting you can address the issue and possibly change their minds.   Or, perhaps,  find out that it isn’t worth changing their mind and the job in question is one that should go to the cheaper guy down the street.   At least if you have all the details,  you can make an informed decision.

“The guy down the street will do it cheaper” tactic (at times it might be the “guy online”, but you get the idea) is often a common method of pursuing a lower price.  When this is used on you,  probably the first question to ask is “why didn’t you go with the guy down the street then?”,  in a non-confrontational way.  Usually,  if a customer is coming to you after having been quoted a lower price elsewhere they either have some reservations about the other shop,  or they’re hoping they can spin you a tale that will make you lower your price.   Getting the details will usually tell you which option it is and point you to the route that may get you the price you want to charge.

Another thing that decoration shops may often encounter is the person or group who wants a print job to be donated,  or who wants to pay for the job in “exposure”.  There are times when jobs of this sort can be beneficial,  but make sure to examine each job of this type carefully before you say yes.  Who will be seeing the work you’re doing,  and is this your customer base?  How many people will be exposed to your work?  What would be the cost of the work if it were paid for, and how does the value of what ever is being offered instead of money measure up?  Will this job generate goodwill among people who could potentially be customers or who could direct customers to you later?  Not all barter or “exposure” jobs are necessarily bad,  but it always pays to do the analysis and be very clear on what you can expect to get before you agree to any such deal.

Finally,  don’t forget your secret weapon when it comes to standing firm in price negotiations,  the absolute rock bottom price you calculated earlier.  If you have that price calculated for every product,  then you know how much room you have to negotiate,  and the floor beyond which you cannot go.

 

One thought on “The Art of Setting Price – Part 3

  1. Pingback: Featured Friday, Information, Inspiration, Instruction 10/19/18 – Threaducate

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s