How to Justify Your Prices Without Compromising

A business ceases to exist the moment it stops creating value and generating sales and revenue.

Pricing is one of the most important aspects of your business and it ties all these three elements together in one. Every business has a pricing strategy they deploy as this determines how they intend to make money and be profitable while at it.

Yet, focusing on benefits and not price is a pricing strategy. It is called value-based pricing. Value-based pricing is a pricing strategy that focuses on the value that a product or service provides to the customer, rather than the cost of producing it.

But justifying your prices to clients can be tricky, especially if you’re new to the game.

Here are a few tips on how to do it effectively:

• Focus on the benefits, not the price. When you’re talking to a client, don’t just tell them how much your product or service costs. Instead, focus on the benefits that they’ll receive if they buy from you. What problems will your product or service solve for them? How will it make their life better?

For example, instead of saying “Our website design services cost $5,000,” you could say “Our website design services will help you increase your online traffic by 20% and generate 10% more leads.”

• Use examples and case studies. Sharing positive feedback from other clients is a great way to build trust and credibility. You can also use examples and case studies to show potential clients how your product or service has helped other businesses succeed.

For example, you could say something like “Our website design services helped our client, a B2B startup, increase their online traffic by 20% and generate 10% more leads in just 3 months.”

• Be confident. Believe in the value of your product or service, and don’t be afraid to stand your ground. If a client asks you to justify your prices, don’t start apologizing or explaining yourself. Instead, simply reiterate the benefits that your product or service offers.

For example, you could say something like “I understand that our prices may seem high, but I believe that the value that we offer more than justifies the cost. Our website design services will help you increase your online traffic, generate more leads, and grow your business.”

Here’s a scenario:

You’re a sales executive for a startup that sells CRM software. You’re talking to a potential client who is interested in your product, but they’re hesitant to commit because of the price.

What should you do?

First, focus on the benefits that your CRM software can offer the client. Will it help them to close more deals? Improve their customer service? Increase their sales?

Once you’ve highlighted the benefits, share some examples and case studies of other businesses that have benefited from using your CRM software.

Finally, be confident in the value of your product. Don’t apologize for your prices or try to explain yourself. Simply reiterate the benefits that your CRM software offers and how it can help the client to grow their business.

By following these tips, you can learn to justify your prices without compromising your position or sacrificing your bottom line.

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About the Author

Omotola Dorcas is a marketing and business development expert with 9+ years of experience in web3, analytics, cloud computing, consulting, and capacity development.

She is the founder of Virtual Domain Agency, a marketing and business development agency supporting African tech businesses to launch, grow, and scale.

Omotola has a proven track record of business growth and expansion. Her passion lies in supporting the private sector and startups within the business ecosystem through strategy and implementation to achieve their business goals.