By Paul Reilly
Before answering this question, consider our research on price sensitivity.

Customers were asked about their buying preferences in our best sales practices study. Participants were given a list of 24 variables and asked to choose their top 12. By frequency distribution, here is their ranking of the top 12 preferences:

  1. Quality and performance
  2. Customer service
  3. Knowledgeable salespeople
  4. Product availability
  5. Standing behind what you sell
  6. Ease of doing business
  7. Salesperson follow-through on promises
  8. Trustworthiness of the salesperson
  9. Product durability
  10. Salesperson accessibility
  12. Technical support

What variable is noticeably missing from this list? You guessed it—price. Buyers indicated there are ten variables more important than price.

I’m not saying price is a non-issue. It’s naïve to assert that price doesn’t matter. Price matters because money is a limited, finite resource. Neuroeconomic research even discovered it’s painful for buyers to part with their money. Price matters because there is always a cheaper option—even if the option is to do nothing.

In my training sessions, it’s common for sellers to complain about pricing. Salespeople gripe to their managers, “Why are our prices that much higher than the competition?” or “Why can’t we get more competitive on our price?” I get it. It can be frustrating when your price seems too high.

But what if your high price was really an advantage?

When you can’t change your price, change your attitude and consider the benefits of being higher. Here are four advantages to being a price leader in your market.

Price is an Indicator of Value

Dan Ariely and Jeff Kreisler highlighted this idea in their ground-breaking book, Dollars and Sense. The authors noted, “Whether it makes sense or not, a high price signals a high value.” Consider the opportunity created by this fundamental truth. When a buyer sees that your price is higher, they automatically assume you are better in some way. The inverse is also true. A low price signals low value. Imagine the difficult task of selling a high-value solution with the burden of a low price.

High Prices Open the Buyer’s Mind

If you’re selling value, buyers expect to pay more. Our research shows that 76 percent of buyers will pay more for better quality and 67 percent will pay more for better customer service. Shouldn’t you try and meet the buyers’ expectations.

A higher price primes the buyer to expect value. Buyers begin asking themselves, “Why are they more than the competition?” This question sparks curiosity and openness. It’s easier to sell value when the buyer is curious about your value.

Reputation is Key

Would you rather be known as the high-value partner or low-cost provider? You could argue both sides. There is plenty of evidence that low-cost models work: Walmart, Dollar General, Aldi, and Southwest Airlines, to name a few. These businesses have built a reputation for low prices. This reputation also attracts certain buyers.

High-value partners have the reputation of charging more. What type of buyers do you attract when you have the reputation of being a high-value partner? Consider this scenario. Your company is known as a high-value partner, charging higher prices—you’re not the cheapest. Therefore, a prospect’s willingness to meet indicates that he is NOT a price shopper. The prospect is at least open to paying a premium to work with you.

Fairness Over Frugalness

Our latest research revealed the root cause of price objections: perceived lack of equity. The buyer doesn’t believe the outcome is a fair exchange for what they sacrifice. This creates an equity gap. To close this gap, many sellers default to discounting. The other way to close the gap is to incorporate perceived fairness. Detail the process you go through to deliver your value-added solution. Highlight how your team invests in the buyer experience to generate the ideal outcome. When buyers are aware of your painstaking effort, your price seems fair.

Price plays a pivotal role in assigning value. In the absence of all other information, price is the greatest indicator of quality. A higher price builds perceived value and sets an expectation of performance. Before your next sales call, remind yourself of the advantages of high prices. This new mindset equips you with the added confidence you need to sell your value-added solution.

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