Part Five: Five Pricing Tactics You Should Dump Immediately
The thinking behind this advice is that the right kind of prospects for your brand, especially if it’s a luxury service, really don’t care about saving money. After all, they’re wealthy and they’re used to paying a lot for high quality goods and services.
Luxury brands don’t discount their goods or services, because it cheapens their brand. Or, if what is being sold is creative in nature, don’t lower the value placed on the art.
Let me point out a massive problem with the belief that customers with wealth don’t respond to price reductions or won’t negotiate with sellers during the booking process. Wealthy customers like money as much as middle-class buyers. They may have more of it and spend more of it, but they still like to keep it in their pockets as much as the rest of us. If you don’t believe me, just ask the listing agent for the last penthouse a wealthy prospect just bought. Or their yacht broker. Or the salesman at the Mercedes-Benz dealership. Price may not be the biggest part of the purchase decision, but it’s not out of the equation.
Those with wealth are not immune to price for their weddings. While value is certainly one of the most important factors in the purchasing decision, all consumers (premium and bargain) are used to receiving some kind of price reduction – especially for large purchases. With price tags over $100,000, luxury weddings should be seen as a big-ticket buy.
Also, remember that while you think you’re selling to the bride, you’re likely trying to convince someone else to pay for the dream she’s got in her head. She’s often not the economic buyer for what you’re selling. Contrary to what we often hear, the buyer who’s accumulated enough wealth to pay for something like this is not making a solely emotional purchasing decision. In fact, the only thing that might be emotional about it all is how much he’s willing to risk to not upset his daughter (or mother of the bride). For him, it’s very likely a business transaction: How little can I spend to make my daughter happy, he thinks. (Maybe I’m a cynic? A realist, for sure…)
Negotiating during the booking process doesn’t necessarily mean you’ve landed a bad client. It means you’re in a two-way conversation with a stakeholder who’s interested in trying to save a buck. You do the same, don’t you, with your suppliers and vendors? Does that make you a bad person? No, it makes you a smart one for asking what you want for yourself and your business. Who can blame a guy for wanting to shave some savings from the cake or catering or dress?
In fact, negotiations are a wonderful way to get to know your potential client. You can learn so much about people when you don’t agree on something. Are they good listeners? Do they respect you when you talk? Will they ask questions when they don’t understand something? Do they yell? Belittle? Or are they considerate and empathic?
If you get a prospect who shows himself to be a complete jerk during the booking process, dump him immediately. Do it nicely, but do it for sure. Bad prospects make terrible clients. It will not get better as you get closer to the wedding date.
If you get someone who is a great prospect, gives you a chance to express creativity in a way you’ve been wanting, will feature excellent promotional images from their event, and/or will refer new business or come back for more events themselves, why not offer a price reduction to them during the negotiations? These things that are good for you all have value, don’t they? Try to put an actual price on them and then be (mentally) willing to discount your price this amount, if it comes to that.
Selling almost always involves negotiations. Just because you sell a luxury product and someone asks for a price reduction doesn’t mean you’re an obnoxious artisan haggling with people on the street. Cultures ancient and modern all negotiate prices. Learn to use it to your advantage and gain the upper-hand on selecting incredible clients who you see as long-term investments.
A quick note on a rich topic:
If what you sell is artistic, you’ve placed a value on the piece that you’re selling to the client. You know the worth of what you are being asked to create, so you treat yourself like a commissioned artist: “For X amount of dollars I will make viewers feel good about what they see or experience,” you think. And you can get away with charging that price if the market is willing to bear the price.
I believe this approach has a lot of merit – for truly subjective, intangible, artistic pursuits. Definitely hold firm and see if the value you perceive for your art matches what the market will fetch.