Knowing the value of your product or service

A Pushy Customer

A short while ago, I received a call from a customer looking to purchase several of my products. He wanted to place a rather large order, and I was really happy about making this sale. Unfortunately, the customer also demanded that he wanted to pay a certain price for that order. Now I couldn’t agree to his price because had I given him what he wanted, I would have ended up actually losing money out of the sale. I’m sure none of us are in business to lose money. I politely told the customer, “Unfortunately, I cannot do that. However, I can give you a discount of a certain amount off of your order.” That was still not good enough for this customer, even though I was giving extreme value for what I was charging. We continued the conversation, and at the end I told the customer that the discount was the best I could do. The customer then explained he couldn’t do that and is going to shop around. I thanked the customer for contacting me and wished him the best, and the conversation ended. After only twenty minutes later, the customer called me back and placed his order.

A Satisfied Customer

Why did the customer call back and place the order with me? Simply because I knew what the value of my product was, and I also knew that at my current price point I was giving extreme value for the price. Meaning, that customer was never going to find a better deal than what I offered, no matter how hard he looked. Devaluing your product or service is one of the worst things that you can do. As an example let’s put you in my shoes, let’s assume you gave in, and gave the customer the price he wanted just so you could secure the order. You might be thinking, “Hey, if I give this customer this price point, maybe I’ll lose some money on this sale, but he will be back and i’ll make money off of the repeat business.” On the contrary, that’s not what I’ve seen happen in my experience.

A Disaster Narrowly Avoided

Instead of getting the repeat business that you are looking for, the customer calls back and demands the same type of discount. From here, you have two main options. Either you give the discount and you end up in the hole again, or you don’t give a discount and you end up having a disgruntled customer, who talks negatively about you to anyone that is willing to listen. Another problem that can arise for you is that since you gave the customer what he wanted the first time, he is going to go and brag, to friends, and family. After he tells everyone what kind of great deal he got you’re going to have a rude awakening. You’re going to have calls and orders coming in from these people demanding the same type of discounts, and if you can’t deliver that, guess what you are going to get? More negative reviews and commentary based on your service. And if you do honor the ‘special rate’, you are only going to be devaluing your product, or service even further diminishing its value and hurting your business. Trust me, you don’t want to bring in these kind of customers!

So, What’s the Ideal Solution?

You want to bring people who understand the value of your product, who understand that you’re not there to rip them off. You’re there to run a business in a way that you can provide extreme value to the customers, while still being able to profit and grow. It’s easy to make this type of mistake because the future ramifications are not readily apparent. You can always negotiate with the customer in a way where you both end up winning. If you can’t come to an agreement then just let the customer go. As long as you are offering extreme value to your customer and you know the value of what you are selling, you cannot go wrong.

Have you had any cases of devaluation of your product or service? Please leave your honest comments in the section below. I read each, and every one.