Each lesson is a direct personal experience. My 45 year career was packed with memorable happenings, but the people – whether colleagues or customers – taught me there was a right way to do good business, whilst making friends and helping organisations grow and prosper along the way.

Maintaining a proper sale price for anything, will result in income generation which should enable a business to pay its way and prosper.  Selling things at a discount from list price – unless the list price has been deliberately hiked – is a road to nowhere, unless you are dealing in such large quantities that any bad effect on profits, is nullified.  But how often do you see 70% off etc – which may go to show how much profit margin was being made in the first place, or, more likely, reflects more or less the cost-to-make – so better to sell at a break even price if it clears the shelves for stocking more profitable items.

Products are one thing, but where you are selling products and services,  – i.e. you have to support the products with people who need paying – then anything other than a ‘proper price’ is unacceptable.

In my last posting before ‘retirement’, a young salesman asked if I would accompany him to a meeting, at which he hoped to clinch an order.  The proposal involved software licenses, maintenance services, plus training for the staff. 

We arrived at the customer’s premises, to be met by the owner and the sharp-eyed lady company secretary, whose role, I soon learned, was to drive down the price by a combination of charm and stealth.

Lady:  Right, we have your prices here, and we want to go ahead with it – but what can you do about the price?

Me:  So I presume that you want to pay less than we are asking for?

Lady:  Well, yes – I’m sure you can squeeze it a bit as I’m sure you’d like the order today.

Me:  Of course I can do a lower price.  Which bit don’t you want?

Lady:  What do you mean?

Me:  You can pay less, but which elements of the quotation don’t you want”

Lady:  We need it all, don’t we?

Me:  I would have thought so – and if you want it all, the price is the price we have on the quotation page.  And any reduction in the price won’t be accepted by the company, as each element goes through our ISO 9000 quality control system, and any attempt to deviate from this will result in a non-acceptance.  There is one exception, in that if you choose to pay in full with your order, it allows for a 2.5% reduction on the full price.  Would you like to do that?

Lady:  (slightly flustered , having been rumbled)  Oh, and that’s final?

Me:  I can’t do anything about it – but I’m sure you know that it represents fine value, and it is what you want – and you do get me at no charge if you want to discuss anything related to all of this in the futureAnd (smiling). I am great value too.

So the deal was done and everyone was happy with the outcome.

As soon as we got in the car to go back to the office, the young salesman said ‘that was brilliant – and you said it all with a straight face’.  I said it wasn’t a question of saying anything other than what I knew and believed.  ‘If you believe it, it’ll come over perfectly naturally, and you’ll say it every time.  Besides, if you knock money off, that comes off the company’s profit margin, your commission etc etc – and the customer will think that he can always ask for it.  It’s all about VALUE, not price.

The Moral

If the purchaser perceives (or is reminded of) the VALUE of what he is buying, price recedes into the background – which is why it’s vital to focus on this and the expected ROI (Return On Investment) he can receive.  And if you can demonstrate this from other customer experiences, you are a long way down the road to maintaining both your margins and the future success of your business.