Masterclass: Why you may be hearing, “You’re too expensive”

Is there anything more frustrating than a client telling you, “You’re too expensive”? I mean, can’t they see you’re better than the low-balling, mediocre competitor they went with? If you’re tired of having to lowball your pricing to win business you’re going to want to watch this video…

5 reasons you’re hearing “you’re too expensive”

Ever had a customer tell you your pricing is too high?
There’s usually an inclination to blame the client. The thinking is that they don’t know what they’re talking about. But if we want to get really good at closing business, we need to take back the responsibility.

I’m going to break down why you may be getting this pricing objection.

1. The first is their motivation to purchase. If they don’t have motivation, which is usually pain driven – something that needs solving right now, they likely won’t buy.
2. And the 2nd impact is their perceived value of your products and services. If they don’t see value, they’ll spend their money elsewhere.

Let’s build out a quadrant where motivation is on our vertical axis and perceived value is on the horizontal one.

If your customer has low perceived value and low motivation, we’ll this is what we call “off radar”. No one is buying in this quadrant and they’re certainly not buying from you.

If your customer is low motivation but high perceived value, this is what we’d call a bucket list purchase. One day I hope to purchase this but the need / pain isn’t great enough yet.

If your customer is low perceived value and high motivation. They’re buying but not from you…unless you’re the cheapest. This is the Low Price trap.

And the golden quadrant is high motivation and high perceived value. This is a real customer.

So, if you’re hearing ‘you’re too expensive’, you on the left side of the matrix (but most likely in the low-price trap). This is a value issue.

Here are 5 reasons you’re losing out to your lower-priced competitors:

1. You haven’t created enough friction. People are more motivated to buy when the chasm between where they are and where or who they want to be is clearly emphasized. If they don’t see a big enough gap, they’re comfortable staying where they are or going with someone who’s lower priced.
2. You haven’t quantified the value. In other words, you haven’t told them what they can stand to earn or save, in real numbers, by working with you. Watch my “what’s 1 shift you can make to charge more” video for more detail on this. At the end of the day, what you’re able to charge is a direct reflection of the value you sell to your clients.
3. You sound like everyone else that’s selling to them. Imagine that you need socks. I sell socks, so I try to sell you these red cotton socks for $5. Now, they look the same as these other red cotton socks you were looking at for $2.50. Why would you spend double with me? You wouldn’t. But if I told you that these socks were worn by Mick Jagger in his last concert, all of a sudden, $5 sounds like the best deal on the planet. If you look, feel and sound like everyone else in your market your customer will pay the lowest possible price.
4. You are overpriced. In other words, the price you’re charging is more than the value you generate for your customer. If I said to you, give me $1 and I’ll make you $0.50, would you? Probably not. The value you generate should exceed your fees, otherwise you’re overpriced and you fall into the category of expense, not investment. And, remember, expenses are the first things to be scrutinized when you need to cut spend, like in times of recession.
5. You’re selling to the wrong customer. Look, there will always be price shoppers or people who don’t appreciate the value you provide because it’s just not aligned with their needs or pains. Your job is to identify these people BEFORE you submit pricing so you don’t waste hours and resources trying to get them to become a customer or worse, lower your pricing and then spends weeks, months trying to make them happy and hating every minute of it.

If you’ve heard, “You’re just too expensive” now you know why. You need to think about whether your prospective customer is highly motivated to buy and if they see true value in you and what you have to offer.

I want to hear what you think. Comment below and let me know your key takeaway from this video.