Let’s imagine that you go shopping for an automobile, and you’re looking for something with four doors and decent mileage nothing special. What if amongst all of the $35,000 mid-sized cars and $28,000 compact cars you find one priced for $7000, brand-new and fully loaded. That seems too to be true doesn’t it? You might be immediately suspect of this low-priced car, and even if you bothered to look at it, in your mind something would always be wrong.
This phenomena is known as perceived value. This is when we expect a product to have a certain price range because it offers us a certain value. When goods or services are radically lower than this perceived value, we begin to fabricate in our minds everything that could be wrong with such a low priced product.
What’s take our example to the world of telephony. You have a customer who is currently paying $50 dollars per line per month from the local phone company. They also pay additional for long-distance, and might be paying a few cents a minute for 800 numbers in coming to their facility. Even if you could offer all of that for $4 per line per month, do you think they would want it? Even if you could cut their bill by 90%, what would you have to do to convince them that it’s going to be as good as what they’re getting now?
Their perception may be that $50 is too much to pay per month, but is it really 900 per cent too much? And what about that long distance that they’ve been paying on for years – when 20 years ago they were told about pin drops and network reliability. How can you convince them that a network that will charge them nothing for long distance can possibly be as reliable as one that they are paying for by the minute?
The simple solution is, make some money. You can price competitively without giving away your company. You can offer value even if that means you are allowed to turn a profit. UCaaS providers have an edge when competing against a POTS-based phone system, anyway, it is almost unfair if we tried to offer service with minimal margins.
Furthermore, the customer might not even take it.
Set Prices by Locality
What many providers have decided to do is offer pricing based on geography. The individual market will dictate how good, good prices are. If the going rate for each seat is $40, because you’re in a luxury area, by all means go towards that price point.
Be Sparse With Freebies
Also be wary of too many “free” products and services. Often times, professionals will believe that they’re being charged for these services anyway. By including a line item for products that may have no appreciable cost, you can offer them in a promotional environment or assign a low price point to it to justify their value.
Everyone has a perceived value for what they hold important. Business phone systems are certainly important. If you try to convince the customer that he’s been paying nine times too much for his phone system is not as likely to get the sale as you are to have your potential client think that you’re calling him stupid. Use other tactics, including gathering Intel about what the going rate for services is in the geographic region. Come to the meeting prepared and willing to haggle, but you don’t need to give everything away for free (even if it is).The UCaaS Salesman’s Guide to Perceived Value