Sales Quote Of The Day
“Sales success comes after you stretch yourself past your limits on a daily basis.” – Omar Periu
Today’s Sales Nugget
How to design a pricing strategy?
Should you lower your price when your competitor is selling at lower price?
I get asked this question several time. While the fact is Customers buy when they believe that the value of what they are receiving is higher than the price they are asked to pay. You might assume that the value that you provide is much higher but the pricing strategy does not always work that way.
There are several factors that influence your pricing strategy. One such factor is your competition. The best way to handle your pricing strategy is by asking, “why is the competitor selling at low price?” and not “should I lower my price?”
Let’s look at few reasons why your competition is lowering their price:
1) They want to penetrate into the market (Jio Used this strategy)
2) The difference between production price VS selling price is high
3) They have low operational cost
4) They are adopting high volume and low price strategy
5) They have other higher commissions sources
6) Their products are not the best
Now that you know their reason, work on your pricing strategy. Do you want to use a penetration pricing or premium pricing?
Without knowing the reason of your competitors lower price never lower your pricing.
Remember, if Competition does not make you better, they will make you bitter.
Study 5 of your competition and their pricing strategy.
If you find this Nugget useful please comment below and share this with your friends.
To receive these nuggets in your inbox, register by clicking on the link.