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Defend and justify your pricing

Often small businesses find themselves justifying their price to customers, and then being pressured to think “I’ll give a discount or match the competition to get the sale”. But if you’re confident in your pricing strategy you shouldn’t need to give away your margin. So what are the best ways to defend your price?

It’s important to have done your due diligence when setting your pricing. You need to know how much profit you want to make, what costs you’ll have and what the market will pay for your product or service. If you’ve done your homework properly, you’ll have more confidence and be in a better position to defend your pricing.

Negotiation tactics

Be confident in your product or service, and believe in your pricing, even if your competition is cheaper than you. Here’re some tips on how you can instill that same confidence amongst your customers:

  • Talk to your customers about the key benefits and why they should choose you. Always use logical points – steer clear of using emotions. Most customers are price shoppers (cheapest is best), so make sure you point out that there’s more to a product than price alone, e.g. quality, productivity, guarantees and warranties, faster delivery and free installation. Come up with a package of advantages that distinguish your product or service and train staff to divert customer attention away from price using this ‘bigger picture’.
  • Remember that customers who try and beat you down on price are the worst type of customer to have. It won’t be a total loss if you lose them.
  • Always keep your cool. Remain professional and friendly, even if the customer is becoming emotional.
  • Sometimes you will reassure your customers that you are the right business to deal with, by not budging on price.
  • Tell them about positive feedback you’ve received from other customers.
  • For a customer, there are always consequences to a failed negotiation, even if it means they can’t make their purchase on that same day. Point out these consequences in a friendly way and remind them of the advantages they’ll get if they buy the product from you now.

Find and exploit the weak link. Customers have concerns other than price. It’s up to you to find out what they are and take advantage of them. For example, people are often frustrated when tradespeople such as plumbers and electricians don’t turn up on time. They might be annoyed at pushy sales tactics in people like car dealers or find the fine print stressful. So, if you can pinpoint the weak link in your industry, you can make it part of your strategy to help justify your pricing, such as:

  • Guaranteeing that you’ll arrive on time, or it’s free.
  • Providing a life-time (or a certain period) warranty.
  • Leaving the job tidier than when you started.
  • Making it clear that all documents are in plain English and will be carefully explained.


Finally, you can usually buy anything cheaper online. People often visit retailers to inspect a product, then buy it online at a cheaper price. You can get around this by zeroing in on the anxieties people have about internet purchases. Will it turn up in the condition you expect, how long will it take, will the instructions be legible, what if it breaks then who do you go and see for a replacement?

In this way, you’re shifting the focus from price to the advantages of buying directly from you.