Two Pricing Experiments...by Claude
Here are two times that I experimented with pricing, and the results. I think this will help a few here to see how prices doesn't matter all that much.
Years ago, I had an office of reps selling vacuum cleaners in people's homes. We sold the vacuum for $1,589. Our office closed 41% of our presentations.
One day, we were having a training class, and one of my managers mentioned that we could sell more, if the price was lower. So I said (Paraphrasing) "Let's do this for a full month. Of course, less money, means less commissions, but just give me a price, and we'll do the experiment". I think they picked $999.
So, for the next month, we sold the same package for $999. Of course, we couldn't see referrals (Because they were referred by people that paid much more). But we used the exact same prospecting programs..the same presentation..and just changed the price.
At the end of the 30 day trial, our office closing percentage was......41%.
So we raised the price back up. And of course, nobody learned anything, and a week later, the reps were complaining because our price was too high.
I still grit my teeth thinking about the money I lost, for no reason.
And....
Maybe 35 years ago, I was selling vacuum cleaners, and getting the same objections we always get....
"We need to think it over"
"I need to look at my finances"
"Right now is a bad time"
"No money right now"
"Things are tight. Come back in a month"
So, one day, I decided never to hear objections again. I found a set of Children's books that were $10 to me, and I decided to sell them for $29.95..door to door.
It was a 5 minute presentation, and a brain dead simple decision. Yes or no....and I would move on.
You may have already guessed it. I heard the exact same objections.....for a cheap $29.95 item.
What I learned (my experiment only lasted a couple of weeks), was that the objections are the same, because the objections aren't true. So, the people say them to every salesman......as a way of not buying. but not having to say "No".
So, class..what have we learned for these experiments?
Price matters far less than you think....and
You get the same objections, no matter what you sell, so it may as well be something very profitable.
Closing someone for an hour..to make $20....is my definition of hell.
Years ago, I had an office of reps selling vacuum cleaners in people's homes. We sold the vacuum for $1,589. Our office closed 41% of our presentations.
One day, we were having a training class, and one of my managers mentioned that we could sell more, if the price was lower. So I said (Paraphrasing) "Let's do this for a full month. Of course, less money, means less commissions, but just give me a price, and we'll do the experiment". I think they picked $999.
So, for the next month, we sold the same package for $999. Of course, we couldn't see referrals (Because they were referred by people that paid much more). But we used the exact same prospecting programs..the same presentation..and just changed the price.
At the end of the 30 day trial, our office closing percentage was......41%.
So we raised the price back up. And of course, nobody learned anything, and a week later, the reps were complaining because our price was too high.
I still grit my teeth thinking about the money I lost, for no reason.
And....
Maybe 35 years ago, I was selling vacuum cleaners, and getting the same objections we always get....
"We need to think it over"
"I need to look at my finances"
"Right now is a bad time"
"No money right now"
"Things are tight. Come back in a month"
So, one day, I decided never to hear objections again. I found a set of Children's books that were $10 to me, and I decided to sell them for $29.95..door to door.
It was a 5 minute presentation, and a brain dead simple decision. Yes or no....and I would move on.
You may have already guessed it. I heard the exact same objections.....for a cheap $29.95 item.
What I learned (my experiment only lasted a couple of weeks), was that the objections are the same, because the objections aren't true. So, the people say them to every salesman......as a way of not buying. but not having to say "No".
So, class..what have we learned for these experiments?
Price matters far less than you think....and
You get the same objections, no matter what you sell, so it may as well be something very profitable.
Closing someone for an hour..to make $20....is my definition of hell.
What if they're not stars? What if they are holes poked in the top of a container so we can breath?
What if they're not stars? What if they are holes poked in the top of a container so we can breath?
What if they're not stars? What if they are holes poked in the top of a container so we can breath?
What if they're not stars? What if they are holes poked in the top of a container so we can breath?