Six reasons why you should never discuss price with customers

13th August, 2014


This post is similar to an internal document I recently wrote for a client to share with their sales teams. However, I have adapted it for general consumption as I feel it applies — or should apply — to a lot of the clients and customers that we deal with.

First things first, let’s distinguish between mention and discuss. We will tell potential clients our price, but we won’t discuss it. We’re not open to negotiation.

There is a time and place for a price-sensitive strategy for products, but those products are frequently designed and built for that purpose and that market. You can’t dip your toe into fighting on price; you’re either in or you’re out. And once you’re in, it’s very hard to get out of.

We all know it’s tempting to negotiate the price when chasing sales, but when dealing with the end consumer, we never ever discuss price. This means we never discuss core price in relation to another company’s pricing, discounts or how much the product will cost per day. The reasons for this are listed below.

1. There are 100 better things to discuss than price

If we resort to discussing pricing to convince a customer to buy our product, we have done a terrible, terrible job of explaining the benefits of what we do. The list of why to buy from us should be almost endless in comparison with other companies.

More so, if the customer is weighing up buying or not buying from us based on price, we don’t want them as a customer. They won’t advocate our company to anyone, and they’ll have no loyalty. As soon as they find something or someone cheaper, they’ll switch.

2. You’re not comparing apples to apples

Your company is different to your competitor — different people, processes, speed, quality and end product. You can’t compare one to the other. So let’s not give people too much information on the one platform that can be compared: price.

3. Discussing price results in a cycle of discounting

It’s a slippery slope when you start discussing price. Your competitor will start trying to beat you. Then you’ll have to beat them. Then they try and beat you. And before you know it, the value is entirely shot in your business, and the focus is purely on the price. It’s one or the other. You focus on price or value — it can’t be both. The focal point for your business should be about delivering value.

4. Your clients may have other priorities besides price

If you asked all your clients and they said they came to you because of the price, then keep talking about the price. If they mention your service, quality, speed and anything other than price, then let’s not usurp their opinions and start talking about something they never mentioned themselves.

Here are some brands that don’t discuss price. Mercedes. Apple. Tiffany. Can you imagine Apple running an advert telling you that you could buy an iPad for $2 a day?

And here are some brands that do discuss price. Holden. Harvey Norman. K-Mart. Which group would you prefer to align yourself with?

5. You should sell on value, not price

Value is an entirely different proposition to price. We can be expensive and be good value for money. You can’t be cheap and good value for money. It doesn’t work like that. There is always someone willing to do it cheaper. And if there isn’t, you’re probably doing it for free.

6. The long-term value of your company is at stake

Companies that hold their price become much more valuable in the long run. If your exit strategy is to sell the business, you will get a much better price for it if you are at the top of the price chart against other products. If you’re in a scrappy fight for price at the bottom of the rung, it’s hard to find buyers. And if they do, they won’t be paying much.

Hopefully with these insights, it’s clear that selling on price is a very slippery slope. Often those companies selling on price have either run out of marketing ideas or have entirely commoditised their brand. Both are positions you don’t want to find yourself in, although at least with the former, bringing in external help could solve that problem.