How to Build a Powerful Pricing Story

Without a supporting pricing story a product or service becomes a commodity. When that occurs, the end result is a greater focus on price.

Many businesses invest a lot of time formulating their pricing strategy. The end price being a combination of:

However a clear pricing strategy is only one piece of the puzzle. If it isn’t supported by a sound pricing story, then much of the investment needed to achieve sales will be wasted.

Competition, and purchasing options, have never been greater, yet in my experience, very few businesses equip their team with a compelling narrative to support their pricing.

When it comes to pricing, it is important to understand there is a difference between price and value in the minds of most customers.

Generally, customers will accept the price being asked if they can see, or understand, the value.

Where customers can’t see the value, or what is different about what you do, then the focus will always be price!

If you find you are continually being challenged on price and discounting, this is a signal you need to revisit your pricing story.

Many people struggle when challenged on price. What do you say when a customer tells you they can buy the same product elsewhere at a far cheaper price?

Certainly the sales techniques for handling objections from past years, no longer work. In fact, as soon as the customer get the feeling they are being “sold to”, the shutters go up.

Today, you need a compelling pricing story that educates the customer why they should choose your product or service, and not the competition.

The starting point to building a compelling pricing story is to understand your customers intimately:

A helpful way to build greater clarity around your customers, and their world, is to use an Empathy Map.

An Empathy Map will help you and your team develop a greater understanding as to what is important to customers.

It will also provide insights you can use in your pricing story.

Having develop an understanding of your customers, the next step to build a pricing story that links what you sell to what is important to the customer:

This includes your:

The next step in building your pricing story is to use the information from the Empathy Map to document:

Your business or product strengths, are a vital part of your pricing story.

However, customers do not value strengths, (expertise, skills etc.), unless communicated in terms of what it means for them.

That is; how the strengths benefit them, the problems or risks the strengths help them avoid.

For each strength document:

The next step in your pricing story is to list what is different about:

Then for each element, like strengths, translate this to what it means for the customer.

Remembering, it is not the point of difference the customer is interested in, but what it means for them.

The next element of your pricing story is the one most often overlooked by businesses – your “hidden secrets”.

“Hidden secrets” are the things you do behind the scenes to provide a quality product or service for your customers.

The first time I came across the concept of “hidden secrets” it was a bottle shop owner who said:

Consultants working with him at the time built a whole positioning and marketing campaign around this “hidden secret”.

Another was a business that used a 48 point checklist to ensure a quality outcome and peace of mind for customers.

Hidden secrets may include things like:

Many businesses go to enormous lengths to deliver a quality outcome for customers, however all too often this is “hidden” from the customer. It is therefore not valued. Nor do they appreciate what can go wrong if these steps are not taken!

Hidden secrets can provide a point of difference and should be an important part of your pricing story.

Again, you need to educate customers how they benefit from your hidden secrets. The problems or risks you help them avoid. How they will feel as a result of you doing things the way you do.

The final element of your pricing story is to “educate” the customer as to what can go wrong should they choose to purchase a cheaper product or service.

This is not about “hard selling” but simply highlighting to your customer elements they may not have considered!

In most instances, there is always a price to be paid for cheap!

Bear in mind the customer may not be aware of the potential risks and costs of going with a cheaper option.

How they will feel if things don’t turn out as expected is an important part of the story.

When all the elements have been identified, the next step is to rehearse your “story” so you can communicate it in a confident manner.

A simple way to do this is to link what you do to what is important to the customer by using – “which means”:

For example:

Importantly, this is not about selling, but learning to communicate your story so the customer can understand the value being provided.

Rehearsal is recommended because:

(A major benefit of practicing your pricing story is the more YOU will feel and believe it. This conviction and belief will flow through to the customer)