3 Ways To Increase Conversion If Your Prices Are Not The Cheapest On The Market

Shocked Woman On ComputerHave you got the lowest prices in your market? The chances are you haven’t. There can be only one as our Highlander friend Connor MacLeod used to say.

So what do you do if you aren’t the cheapest? How do you justify to your website’s visitors that you cost a little bit more than Amazon (or significant other)?

In this post I’ll give you 3 techniques we’ve used successfully to increase conversion (more than doubling rates in some cases) by countering the pesky objection that your prospects think you’re too expensive.

Avoid Best Practice CRO

I find it crazy that so many online businesses spend so much time looking at what everyone else is changing on their sites and then blindly copying them.

If I were to run an online store that sells baby clothes (my wife would love that to be the case, it would save us a fortune) then for me to look at what a site selling furniture in another country is doing isn’t going to help increase conversion is it?

Not readers of this blog of course! You’re out to unlock the truth aren’t you? The source no less.

Finding out with certainty your visitors’ objections and then resolving them at the precise moment they have them is the only reliable way to increase your conversion rate and you know it.

I’ve proved this methodology works on many clients now and I won’t deviate from this course and nor should you.

Do You Want To Buy A Wii?

Want To Buy A Wii?Think about that question for a second. Chances are you probably don’t. Me too.

So what are your reasons? For the sake of our game mine are:

  1. I’m not big into gaming because when I do play I get obsessed and find it difficult to focus on anything else until I complete the game.
  2. I don’t want another box in my living room with wires and things strewn all over the place. I live minimally and just want a TV on the wall and nothing else.
  3. They’re a bit old and rubbish aren’t they? Does anyone actually use them anymore?

So if I ended up on a website that sold Wiis then unless the site tackled my objections head-on then they wouldn’t have a hope in hell of getting me to buy one.

Resolutions to oppose my objections

Number 1 might be tackled by explaining that whilst the games are fun they’re actually not very addictive because of their physical nature. Industry statistics could be cited that showed the average game time of a Wii player compared to Playstation junkies.

Number 2 could be countered by explaining how neat and tidy it’s possible to get the unit and how it can easily be packed away during times of low use. There’s this nice little storage unit for example.

Number 3 may be resolved by showing how many other players there are out there. How fast the user-base is growing perhaps?

Show me how much fun Wii users have using video testimonials and game play. Segment those videos by family maturity so I can see families ‘just like ours’ rocking the Wii world.

Do all of those things well and you might actually have me tempted.

If our fictitious website knew that enough people like me visited them then their sales would likely increase quite a lot.

See how this works?

How Might Best Practice Do That?

But if our fictitious website owner is only looking at best practice articles then they might have a play around with button colors, or Call-To-Action text, or a new design trend to make the site look more modern.

Free Checkout Buttons Different ColorsNone of these things are going to get me to buy are they? Not a chance. The only way they’ll get me to buy is by addressing my own personal objections with cleverly thought through resolutions.

That’s the technique the likes of Joe Sugarman used throughout his direct marketing career and it still works today because people are still people and we respond to the same things in the same way.

Collect & Analyzing Voice Of Visitor Feedback Instead

You need to be collecting Voice Of Visitor (or User Voice) data to find out what your visitors specific objections are and then you need to come up with ways to resolve those objections. Here’s an easy process to do that.

Then you need to test whether your hypotheses are correct or not. You are AB Testing everything aren’t you? Of course you are :)

Drums Please – The 6 Most Common Objections

I see the same objections come up over and over again and whilst I tend to use different ways to resolve those objections there are still patterns that develop.

Until now I’ve kept these close to my heart but where’s the fun in hoarding all the knowledge.

Drum roll please. In no particular order the objections I see come up the most often across the clients I’ve worked with are:

  • Your prices are too expensive
  • There’s no reason for me to buy right now
  • I’m just researching
  • I don’t understand what Product X does
  • I don’t believe your company is any good
  • I’m confused how to best get started

It’s very rare to not see the ‘too expensive’ one come up and unless you do actually work for Amazon then it’s probably there for you too.

Everyone likes a bargain so if you are slightly more expensive than your direct competition then you have to justify why and show them you’re the company they should be spending their hard-earned money with.

Here’s how.

Maybe you should drop your prices?

Don’t do it. Most of the time it’s not wise to compete directly on price. Maybe you would like to be able to confidently say you are the cheapest out there so if you slashed your margins maybe you could even do that.

But for how long?

Eventually your competition is going to react by slashing their prices. Then you’ll need to do the same to justify your earlier claim that you’re the cheapest again.

Before you know it you’re looking at certain products as loss-leaders with the hope that visitors will prop up your margins with extra items.

What if this doesn’t happen as much as you’d like? You and your business will get into trouble is what.

Don’t Compete On Price, Compete On Value

Competing on price alone is a fools game that will only get you so far. If you’re not careful you’ll slowly strangle your market no-one will survive.

Here in Denmark we had a free newspaper war a few years back. There were no survivors and a lot of blood left in the street.

London Free Newspaper WarsJust before I moved over here 4 years ago from the UK there was a repeat of history in London as three free newspapers went to war in the same week if I remember rightly.

London Lite, thelondonpaper and The Evening Standard went head-to-head and toe-to-toe for a good two years before the first two went spectacularly out of business.

When the dust settled The Evening Standard went back to a paid model and the normal Daily-Mail-In-Disguise service was resumed.

What extra value do you bring to the party?

One of our clients used to believe that they bring nothing extra to the party.

Honestly. They’ve been in business for over 20 years and their Head of Marketing said to me that he thought there was nothing they did better than their competition.

Rubbish I said. There’s always something (and in their case plenty). You don’t build a business with $10M turnover unless you’re doing a lot right.

We’ll be testing these points of difference in a number of ways in the weeks/months ahead and I’ll report back the results here once they’re OK with that so make sure you get on our list if you haven’t already.

Here are the 3 techniques I like to use when resolving the objection that the products are too expensive.

Technique 1 – Compare yourselves directly with your competition

Don’t make your visitors think is a constant phrase you should have bounding around in your head.

Unless you sell something completely unique it’s likely you have direct competition and even if you do have something unique you’re competing with the visitor that decides to do nothing at this point in time.

Take your competiton on in an open battle (in the nicest possible of ways otherwise you’ll come across arrogant and humility is king when it comes to building trust between you and your prospects).

Pick out features that you have that no-one else has and highlight them. You might do what Crazy Egg did and create a natty little comparison table.

Crazy Egg vs Clicktale vs Google Analytics Comparison

You should make sure you show something that you believe isn’t that important but that your competition does better as it shows honesty and balance in your comparison. This in hand will increase trust in the evaluation.

Did you see that line under the Crazy Egg table? Take note how that simple statement makes the whole thing more believable.

Of course you’re providing a one-sided comparison – this is your marketing material. Call this out yourself before your reader does and you’ll keep their trust and win the comparison war.

Compare yourself against doing nothing too

Never forget that your biggest competitor is for the visitor to do nothing right now. We’re lazy creatures at the end of the day and doing nothing is much more appealing than doing something.

Give me an opportunity not to act right now and I’ll take it. Are you the same?

Tackle that objection head-on too and explain why the prospect should act now. Quantify their pain as much as you can.

Technique 2- Be open with how much money you make

Here’s a shocker for the corporate types. Visitors respond well to complete and open honesty. Most of the time your visitors are convinced they’re being ripped off and you’re making millions. It’s natural instinct.

3 Ways To Justify Your Higher Online Business PricesThis technique dispels that and if you decide to do it your competitors will probably not.

People respond well to honesty (don’t you?) and there’s nothing more honest than a company saying openly how much money they make and what they then do with that cash. So be honest and tell the whole truth.

What margin are you making on this product? What do you then do with that money that is in your visitors best interest (product development, customer services, support etc)?

The more detail you go into with the way money moves through your organisation the more honest you’ll appear to your prospects making it more likely they’ll want a financial relationship with you.

There are a few extra kickers to this technique:

  • Unless you’re Apple your margins are probably a lot less than your visitors imagine so being open about them will likely dispel a few myths (in a “wow that’s a lot of work they do to make $x from me!” kind of way).
  • If you have a sales team (over the phone or in person) that get a lot of requests to knock a little bit extra off the price this gives them a line of defence.

Look at our website and you can see how much money we make.

Technique 3 – Do the calculations & thinking for them

People are naturally lazy so if you do the math for them and it looks about right you’ll build trust. So if your product or service saves people time then explain in a logical way exactly how much time they’re likely to save if they use you.

This is an incredibly powerful technique and leans heavily on the don’t make me think philosophy pioneered by Steve Krug.

Save Time MoneyA great example that I’ve been working on recently is with a travel client of ours.

Being a travel agent we’re competing against people wanting to book all the elements of their holiday separate. This can make people feel more in control and also make the holiday seem more tailored and special.

By doing it themselves though they also have to spend a lot more time on research and administration of said bookings.

So we’re going to call that out and explain that according to scientific research we’ve dug up on average people spend 17 hours researching where they’re going, 3 hours talking to hotels/airlines/transfers, 6 hours on the holiday arranging tours, booking taxis, talking to reception etc etc).

In this world of time poverty not having to deal with all these unknowns and have one phone number they can call any time day or night from the moment they book the holiday to the moment they get home is appealing for some.

Conclusion

Don’t compete on price. Compete on value instead and use some or all of these techniques above to sweeten the proposition of doing business with your company.

You’ll be surprised how many more people will choose you. We’ve scientifically proven this to be the case :)

Do you do anything different that you’ve found works well?

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Comments

  1. ShuaZee says:

    Sounds interesting, but what would be the tactics if you are competing agains the likes of Bitrix24 or Asana (meaning their free plan offers more that most paid options in CRM/PM niche)?

    • Hi ShuaZee … thanks for your comment

      That’s a great question and it’s a ‘problem’ that a lot of service companies (like yours presumably) face on the Internet today. All things being equal everything gravitates to free eventually and none more so than the CRM niche for sure.

      Essentially though ‘free’ is still a price and a lot of what I say above still stands. You should always compete on value over price anyway so at least in this scenario, short of actually paying your customers to join and stay with you (not a strategy I would recommend unless you have very deep pockets and you’ve got a excellent handle on your Customer Acquisition Costs), you know that the price can be no lower. It’s time therefore to compete solely on value.

      Technique 1 still applies doesn’t it?

      Where is your product stronger than Asana’s and Btirix24′s? Highlight those features and backup with undeniable proof your claims that you’re better in certain areas.

      Do you have any customer testimonials from people saying they switched from theirs to yours and that you are better? If so, use them. If you don’t then don’t be shy about seeking them out. You can always ask your customer base if they’ve tried those others and where they think you’re better.

      Technique 2 also applies. People/companies can be very suspicious of free. They often want their suppliers to cost something because it means they’re more likely to be a stable business.

      In this particular space it’s quite a commitment to change your CRM solution. There are all sorts of training implications and onboarding headaches, and it’s a bit like moving house in as much as the process of doing so is a real pain in the ass but once it’s done then everything is fantastic.

      Explaining that you cost something because you have a great handle on your numbers and you’re building a sustainable business will be seen by many as being a strength not a weakness. Checkout Evernote’s CEO, Phil Libin. He often talks about how he’s building a 100 year old business. Imagine how trustworthy that makes him sound over a competitor like Google who will likely kill Google Keep if the take-up isn’t strong.

      I know where I’ll be keeping all my notes, images, and voice recordings forever and a day.

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