My friend Ajay is taking a beating in India, over pricing. It seems that his clients are prejudiced: they always make the discussion about price. Here are some suggestions to help change the pricing game…
Look at your watch. (Did you do it? Thanks) Is that the least expensive watch on the market today? **What?** It’s not the cheapest on the market today? I am [almost but not really] shocked. Why not buy an inexpensive watch – – when every watch tells you the time, shouldn’t you wear the cheapest one you can find?
Do you feel like you paid too much? Or maybe, you aren’t wearing a watch. So let’s apply this line of questioning to your cell phone… or your car… or your address… Here’s my point:
I don’t claim any expertise over the market in India, but I do know a lot about buyer behavior. The only antidote to prejudiced pricing discussions is value.[/box]
Why do you value your watch (cell phone, car, etc.)? Quality? Reliability? Or are there some intangibles – the way it makes you feel?[box]
The fact is that our personal purchases are driven by both fact and emotion.[/box]
Which side wins can change depending on a number of factors, but both fact and emotion impact a purchase decision (any purchase decision). Even a corporation requires the decision-making ability of human beings – a decision where fact and emotion can intersect, even in the most sterile purchasing environment.
My question for you is: What is the personality of the company you are selling into, and what are their emotional needs? (Are they heartless, cheap, and drive a hard bargain? OK, gotcha. So, What corporate needs are driving these descriptions?)
These needs may include prestige, quality, competitive advantage, profitability, a desire to make you squirm – – only you can fill in the blanks. But money – pricing – is only part of the value equation. The other part is what a particular product means to the company. Another way to say this: What is the value of your brand?
It may seem strange to think of a company’s emotional needs, but believe me: companies have personalities, whether in Kanpur, India or Kokomo, Indiana. Individuals run companies, individuals make buying decisions, individuals have emotional needs (as well as financial). Buying a complete product means buying an experience – service, support, reliability and more will be a part of the purchase decision.[box]
The experience is what is being sold, and being cheap will cheapen your experience.[/box]
While the budget may be fixed, my take on any discussion about pricing would include a thorough understanding of the puts/takes of the emotional appeal of your solution. If you say, “there is no emotional appeal to our solution” then I would respectfully reply, “you haven’t thought this all the way through”.