The price is a function between value and transformation (expected result) (T) that you create for the niche (N), the capacity of the niche to pay your mechanism and the prices of the competition.
Price (Transformation, certainty of the promise (likelihood of it happening), competition, ability to pay)
That is, if we are able to demonstrate the benefit that we generate for the client, and that they believe us (Credibility), we will find ourselves in a position advantageous in the sale.
It is what is known as Expected Value: How much can I earn/save?
Value represents all possible outcomes and their respective values ??and probabilities.
E [X] = i = 1n Xi* P(Xi)
Where n is the number of possible outcomes, E [X] is the expected value of all outcomes, Xi is the outcome value of event i, and P(Xi) is the probability that Xi occurs.
The expected value is used to justify the investment of your future clients.
If the expected value is greater than the cost of the investment, then a rational buyer will decide to close at that time.
What we are looking for is that the phrase echoes in the mind of our client: This pays for itself!?
Expected Value Calculation Template
Customers love this way of justifying their purchase decision because it shows that you did the work for them, know their business, and are able to justify their investment.
Here you can see a video explaining the use of the calculator:
If you cannot clearly identify the ROI, work with some clients to estimate it, but if you are able to pose these scenarios anticipating your client's question, the sale will be easier by providing extra security to their investment.
It is the success stories and the real results that will give you enough credibility so that the client perceives something positive in your solution for them.
Very often you will have to make assumptions about your case when you don't have real information.
You will be able to charge a higher price if the expected value is higher than that of a competitor, which means that the transformation value is high and the probability of the transformation happening is higher (you have more credibility).
Success stories, your positioning as an expert, collaboration with partners/influencers and the reliability of your messages will give you a higher probability, which is why it is so important to collect all this information as soon as possible.
That is why throughout the Sales Planet Sales Program we are going to try to promote each of these topics.
Don't do anything now.
The important thing is that you understand the concept of justification that we will use in the sales presentation and lo tengas presente en las entrevistas para detectar cuanto "le está costando a los clientes" realizar las tareas de manera ineficiente.
I repeat: You must be clear about how much time/money it is costing your client to do what your product solves.
You will be able to make calculators that are more visually attractive than Excel to incorporate on your website, use as a lead magnet or in your demos to demonstrate to clients the effectiveness of your solution and the TRANSFORMATION that they can achieve thanks to your solution.
Calconic usage example:
Techniques to show the price and justify the ROI:
This concept is more linked to the negotiation of proposals, but I want to comment on it here in case you have an open process and you find yourself in this situation.
NEVER reduce the price without conditions, you should always modify the scope: Less support, fewer features, less time,...
An interesting condition is always the use of that discount in exchange for a success story so that the client gives you permission to publish the results obtained with its mechanism.
In this way, you will take advantage of that discount for your own benefit.
The ideal is not to give discounts, but if, for whatever reason, you are interested in working with that client, we recommend:
1) Accepting the discount, or part of it, in exchange for certain conditions (such as can be a success story, a major commitment, etc...)
2) Do not accept the discount but increase the value: And what do you think if I give you the first month for free? And what do you think if I allow you to hire one more user? And what do you think if I give you more hours of support?
Negotiating is one thing and haggling is another.
Try never to haggle unless you get an advantage for it.