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How can I figure out how much to charge for my product or service? What is the highest salary (raise) I can ask for? Talking about money is a thorny issue. Everyone has opinions about it but those underlying concerns are:
-Did I set the price so high that no one will buy? (Is the salary I asked for so outrageous that they will hire someone else)
-Did I give them such a low price that they question my value or did I leave money on the table? (Is the salary I asked for so low that they wonder if I know what is going on in my field?)
This month I had three different experiences that involved pricing.
First my mother showed me a pair of shoes that she got through Medicare. (She is a diabetic and evidently Medicare will pay for one pair of shoes a year.) She told me she would never order them again. Why? Because the doctor charged Medicare $500 for the shoes and she thought that was far too much money. (She watches the government’s money like her own!)
Next a friend told me most of her colleagues were telling her to charge more for her services. She was adamant in her stance that no one was worth what they were telling her to charge. In fact her colleagues were in the same business and commanding the fee they were recommending to her.
Finally in the news once again one of the presidents of a large company here in the US (Exxon) was reported to have negotiated a huge retirement package.
Finding an appropriate price is not easy. There is a lot of psychology in pricing along with some mathematical computation. Sometimes people forget to think about the mathematical piece. The cost of delivering the product or service including the time of the deliverer is important. If you do compute your actual costs you can then add a percentage on top (margin) to give you your profit.
Seems simple but now you’ll need to see what others are providing. How does your product compare with those it competes with? This is the market research part of pricing. If you are negotiating salary for a job, you’ll want to know what others who do similar work get for that job.
Now here is where the psychological factors come in. Price something way above what the competitors charge and you could price yourself out of business - maybe or maybe not. Perhaps your product is like no other that it competes with. In my mother’s case maybe there is only one manufacturer of shoes for diabetics and each pair must be made individually to that person’s specifications? The price may in fact be justified.
Price something way below what the competitor’s charge and it is possible you will be very busy. If you haven’t done the cost analysis, you may find yourself losing money though. Another possibility is that potential customers may question your value. “Why are you so cheap?”
Justification - that is what is necessary. In your sales pitch you will need to tell the potential buyer what makes your product so special. (Why you do charge so much or so little.) If my friend doesn’t really believe that she is worth more than she’ll have a hard time convincing others that she is. Clearly Presidents of large corporations have no problem with their sales pitch and are really good at convincing boards of directors to pay them huge sums.
“Whatever the market will bear” is often the philosophy you hear. It certainly must be the justification of the presidents and CEOs who get big salaries, bonuses and pensions. In my opinion the answer lies somewhere between my friend who doesn’t think she is worth that much and the big company pay outs. That is a place where the business owner gets what he/she is worth and the consumer gets the value he/she expects. For me there is also integrity involved in pricing not just what the market will bear.
Take Action
1. Assess your own work situation. Where are you undervaluing yourself? Write down a list of the benefits you offer to your customer (employer).
2. Check your competitors. What do they offer? How do they price their offer? Compare their offer to yours. How are they alike? What is unique about your offer? How do you tell your customers about that uniqueness?
3. Not unique? Why would your customers choose you instead of your competitors? If your uniqueness is price alone, you are on a slippery slope because there are always others ready to price below you.
About Alvah Parker
Alvah Parker is a Business and Career Coach as well as publisher of Parker’s Points, an email tip list and Road to Success, an ezine. To subscribe send an email to join-roadtosuccess@go.netatlantic.com.
Parker’s Value Program© enables clients to find a way to work that is more fulfilling and profitable. She is both a Practice Advisor and Coach to attorneys, managers, business owners, sole practioners, and people in transition. Alvah is found on the web at http://www.asparker.com She may also be reached at 781-598-0388.
There is a major problem in professional selling today.
The problem is, most people within the profession today don’t even know what professional selling entails to be effective, efficient or successful. That makes it a great opportunity for you, but a real problem for you at the same time.
It really comes down to making a distinction between two different ways of “being” effective in professional selling just like making a distinction between how something is and what something is.
Let me clarify…
“Learning How to Sell”
is COMPLETLEY different than
“Learning Professional Selling”
By this I mean…
“Learning How To Sell” requires a phone, a desk, a customer, a couple of books on sales, and asking a ton of questions. Eventually you will figure out how to “do” professional selling. So when you ask “how to” sell, you are really asking “How do you accomplish professional selling?” You are in essence asking how to “carry out a task”; Learning how-to accomplish something is a verb (remember from English where a verb is “the part of speech that expresses existence, action, or occurrence?
“Learning Professional Selling” requires an understanding of theory, practice, as well as “why” something exists and “what” it is. It requires a description of professional selling that says what it is like, how it works and so on. When you learn professional selling, you are asking to understand what selling is not how to do it. In order to know what something is, you actually have to describe it. In other words, professional selling is a noun, not a verb. Remember from English class “A noun is a word that can serve as the subject or object of a verb” You “do” professional selling, you “become a professional seller” etc.
The problem with “Learning How to Sell” is, it requires:
– Hearing “No” a lot until you get it right (that’s why you have to be persistent, supposedly)
– Failing a lot (that’s why you have to have a “thick skin, supposedly)
– When you fail and hear “No” a lot, you will have to find ways to stay constantly motivated (that’s why you hear that you have to “have a positive attitude, supposedly)
– It requires going to “a guru” asking them what they did, only to hear things like:
– “There are no silver bullets in sales kid, you just have to do it!”
– You just have to figure it out on your own
– If I tell you, it will not help you
– It’s a numbers game! Just keep making calls, you’ll get it!
– etc
on the other hand…
The problem with “Learning Professional Selling” is, it requires:
– Asking what selling is
– Understanding “what” professional selling is not “how” professional selling gets accomplished
– Learning the systems, theories, and underpinnings of professional selling so you can become a better salesperson
– Learning how the profession interfaces with other professions
– Discovering the systems of professional selling and how they all interact
You see, learning “WHAT” selling is, is a precursor and an actual requirement for doing professional selling well. You have to know what you are doing in order to be any good at it! Right?
Unfortunately most sales people have no idea WHAT selling is! Don’t believe me? Ask them “What it is.” They will look at you like you’re a moron. If you do get someone who attempts to answer they will answer in “How-To” terms. They will explain “WHAT” it is by explaining what they “Do”.
I want to be really clear on this, so allow me a little more license…
As an analogy, pretend it is 1,000 years ago and you are brought into a cave and handed a sharp object to use as a scalpel. You are told to operate on someone lying on a table, and take out their “pain.”
Of course, you have had no formal training in this–and you tell your mentor of your concern.
He doesn’t let you operate on your patient this time. You are told that you can watch him and others plenty of times, but there are “no silver bullets” to finding “the way.”
After 1 week, you have watched some operations.
Then your “VP of Cave Medicine” comes to you. She tells you that you must complete 1 operation a day in order to get paid, and no less than 30 operations in a month. Of course, your formal training will begin in 45 days.
You don’t start off too well. You “save” some, you “lose” some. “It’s OK,” you hear from your cave mates.
Then, the big training day arrives!
You are trained on:
– How to cut someone open
– How to take out their pain. It’s called an appendix, you learn!
– How to ask questions to diagnose their pain
– How to conduct more operations in less time
– How to fill out your paperwork using graphite rocks
– How to work your “cave operation funnel” so you always have an operation waiting!
Back into the fray you go!
You’re really bad at this! You approach others that have been conducting these operations for years for help. You are told great sayings like:
– “Hang in there, you’ll figure it out!”
– “Be patient, you’ll find your way one day!”
– “The more you cut on someone, the more apt you are to figure it out!”
– “Increase the amount of operations you conduct and you’ll save more lives!”
Again, you “save” some, and you “lose” some, it’s ok.
And then comes the shock:
“You are not conducting enough successful operations. You must now perform double the amount, and you’ll be more successful!” It’s all about how many operations you can line up. Don’t worry about the ones that didn’t make it. You’ll get better! at what, you wonder…
To “take matters into your own hands”, you read some books on cave medicine. And the books tell you things like “only certain personality types will ever be successful at cave operating!” Of course, you think, it’s not everyone who can repeatedly lose someone on the operating table…
The books tell you things like:
– How to successfully cut someone open
– How to get them to lay down without any anxiety
– How to ask them questions
– How to get them to pay for your services
– Etc.
Welcome to the state of the Sales Profession today. Seriously, I’m not kidding. It’s not a rosy picture and I know that. Sorry if it made you squeamish.
But I firmly believe if you are given the WHAT of the profession, you will learn how to plug in the “HOW” more effectively. Just as no doctor would ever cut on someone without truly understanding the “WHAT”, I believe understanding the “WHAT” of Sales will lead to a much “safer” sales environment. Just as medicine is a serious field, Selling is a serious business. Billions of dollars are at stake–welcome to the new paradigm, and the new beginning.
To complete the analogy, if we give you the information about the “digestive system,” “nervous system,” “cardio-vascular system,” etc, you will have a framework that you can plug your knowledge into.
Great… now you REALLY are confused!! Right?
Let me let you off the hook…
In the film “The Matrix”, the main character, Neo had a choice in one of the deeply compelling scenes in the movie. His choice had to do with the option of choosing the “red pill” or the “blue pill.” You see, the red pill would reveal the truth (the WHAT) and the blue pill would make him forget everything that had happened and put him back into his comfortable reality.
The crux of the choice?? Once Neo took the red pill - he would never be able to turn back. Isn’t that fascinating? The choice between what he believed he knew and the unknown ‘real’ truth is something that very few people can make in their lifetime.
How could Neo possibly make the choice?
On the one hand, if he took the red pill, he would be exposed to what the truth really was (and what if he didn’t like it)? The red pill only promised one thing - the promise of truth.
On the other hand, if he took the blue pill, everyone he liked and everything that he had built his life upon (and was comfortable with) would stay in place. He would never know the truth, but (because his memory would be erased) he wouldn’t know any better. The blue pill is basically the “Ignorance is bliss” pill !
Of course, my question to you isn’t necessarily about pills, but what they stand for in these circumstances. The question I am asking you is whether reality and truth about WHAT professional selling really is - is worth pursuing.
So I give you a choice….
The blue pill will leave you as you are, in a life consisting of habit, of things you believe you know about the sales profession already. It will leave you comfortable, believing you do not need to know the WHAT or the truth to sell. The blue pill symbolizes the current beliefs in professional selling:
– There is no “what” of selling and there are no “universal truths”
– Only certain people can succeed
– Sales people are mostly “born”, rarely “made”
– All you have to do is read someone’s sales book and you will find success
– It’s all your fault if something goes wrong in sales
– You just have to learn how to overcome objections
– etc
The red pill is an unknown. If you take it, it can help you to find the truth in professional selling. You don’t know what that truth is, or even that the pill will help you to find it. The red pill symbolizes the future of professional selling. It symbolizes the risk, doubt and questioning of reality. In order to answer the question, you get to gamble your whole life, professional future, world on a reality you have never experienced. Unlike NEO, you get to go to the table of contents of the book and the other bonus items to see what this “truth” is before you take the pill, but ultimately:
If you keep reading my articles you will be taking the Red Pill.
As Morpheus say’s in the move: “If you take the red pill, I can only show you the truth [i.e. the WHAT] nothing more, nothing less - the choice is yours.”
Brian is the Chairman and Founder of the the United Professional Sales Association (UPSA). UPSA is a non-profit organization headquartered in Washington DC that has addressed the concerns and challenges of individual sales professionals. Brian has authored the world’s first universal selling standards and open-source selling framework for free distribution. This ‘Compendium of Professional Selling’ containing the commonly accepted and universally functional knowledge that all sales professionals possess. The open-source selling standards have been downloaded in 16 countries by over 300 people. Over 30 people have made contributions.
Because UPSA is not owned by one person or any company, it is a member organization and guardian of the global standard of entry into the sales profession.
Find out about the membership organization and understand the processes and framework of professional selling at the UPSA Website at http://www.upsa-intl.org
Find out more about Brian at: http://www.brianlambert.biz
In this article, I would like to talk about the three “well-known but often ignored” secrets for creating a successful product.
These secrets are still valid in real world as they are online.
The main mistake most entrepreneurs do is to create a product and then they WORK HARD TRYING to sell it.
Wrong! Wrong! Wrong!
SECRET NO. 1
Always create a product ONLY if there is a market for it!
How can you find out if there is a request for your product?
Quite simple, read the forums, search them for terms like “I wish there was a thing that…” “Can anyone help me do…” “What’s the best way to…” etc.
I’m sure you understand. All you have to do is to create a product that will fill that want.
Secondly, you can search the web, using terms related to your product. If there is competition that looks like is doing well, then there is a market for your product. Just make it better than the one of your competitor and you’re on your way to riches. 
Thirdly, you can see how many people search for terms related to your product using Overture’s suggestion tool located at: Click Here!
SECRET NO. 2
Never try to sell something to people that don’t have the money to buy it. Always create products that appeal to people with money.
This is a great mistake most people make. They try to sell high priced products to people that cannot afford them.
SECRET NO. 3
Always create a product that you would love to buy. Put yourself into your buyer pants and think about how would you like to be sold.
Create products that you’ll want to buy; sell like you would like to be sold to; and, in generally do things the way you would like the things to be done to you.
Follow these three secrets and in less than 999 days you’ll have a six-figure income. Guaranteed!
Have a Profitable Day!
Ovi Dogar, The CoversExpert
About The Author
Ovi Dogar is specialized in the creation of professionally custom made covers that really sell. You can view some recent samples of his work at http://www.absolutecovers.com/samples.html; ovi@absolutecovers.com