Have you ever wondered what to say to someone who claims you are more expensive than a competitor? Here’s a story and a lesson I learned from my father.
My dad had a post-retirement business, building and selling oyster floats – a rig used by people with water access to raise oysters for eating and helping the environment. Dad developed a better version of an existing design that solved problems with the old tried-and-true method. As his sales and the product’s reputation grew, it was natural that competitors entered the market.
He primarily sold the oyster floats at farmers markets in eastern Virginia. One day a potential customer walked up to Dad’s booth, saw the price and scoffed. “These are too expensive,” the man said. “The guy on the next row is selling the same thing for less. You’re priced too high.”
“No, I’m not,” Dad replied. “I’m not more expensive – his product is cheaper.”
“What do you mean?” the customer asked.
Dad explained, “I designed and built these floats to solve a number of common challenges growers face. My float has a lid to keep the raccoons and otters out, reinforced floats, two stages of grow-out bags, and it uses premium coated mesh. I also have the oyster spat (baby oysters) to get you started.” He went on to add, “My float price has everything you need to get started. Go look at the other guy’s float, and consider what you don’t get for that cheaper price.”
About 15 minutes later the customer returned and bought Dad’s “more expensive” float. He said, “You’re right. The other float is cheaper.”
My father knew that he was providing value and priced his products accordingly. His price was what it took to build a quality product the right way, without shortcuts. He built the product he wanted to own. Imitators built a commodity designed to compete on price, not value.
If you price your product or service to provide real value, you will always have competitors that are cheaper. When asked about your higher price, take a lesson from my dad. Reinforce the value you provide and ask the prospect, “Why is the other product/service cheaper? What aren’t you getting?”
PS – When Dad was ready to fully retire, he sold the business to someone who continues to operate it. He was able to sell a business that anyone could have replicated because he created lasting value.
