Cheap is No Substitute for Value

Added September 25th, 2009

By Tom Reilly, author of “Crush Price Objections

"What we obtain too cheap, we esteem too lightly" Thomas Paine, American Patriot

Price is not the only component of value; it is simply one. What makes a price look like an incredible bargain? It is the overwhelming size of the package for the price. When a buyer perceives the price as small and the solution big, he considers it a great value. Buyers make relative value decisions. When you demonstrate the size of your solution, you smother the price obsession with your value. Size matters.

Another important component is cost. Price is the short-term acquisition number while cost is the long-term ownership number. Cost is bigger than price. A buyer that objects to price without considering cost is making a nearsighted buying decision. If your price is higher but your cost is lower, you probably offer a better value. Ask the buyer this question, "Do you really want to continue paying for this long after the initial purchase?" When the buyer flashes you a look of disbelief, demonstrate how much it really costs him to buy a cheaper alternative. Paying less on the front-end often means paying repeatedly throughout the life cycle of the product.

"I do not prize the word cheap. It is not a badge of honor. It is a symbol of despair. Cheap prices make for cheap goods; cheap goods make for cheap men; and cheap men make for a cheap country." – William McKinley, 25th President of the U.S.

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