Sweetening sales in the recession

There's a certain discounter's mentality that grows out of any recession.

In trying times almost everything is perceived as negotiable, and businesses often find themselves bending on price just to make a sale.

Though this may generate short-term sales, in the long run it could severely undercut a business' ability to survive and weaken the brand, say experts.

"Price is a credibility factor," explains Lawrence L. Steinmetz, author of "How to Sell at Prices Higher Than Your Competitors" (Horizon Publications, $24.95) and president of High Yield Management, a Boulder, Colo.-based pricing advisory firm.

In fact, consumers often associate a higher price with a better quality product, Steinmetz says.

Jumping the gun
The problem very often is that salespeople are too quick to cut their prices the moment a customer asks, he notes. They either are too apologetic of their pricing or offer the customer an out, like "what will it take to get your business," which opens up the floor to negotiation, he explains.

If you set a fair price to begin with, then you should be willing to stick to it.

By cutting your price, you're "saying the original price you quoted has no meaning," notes Lenann McGookey Gardner of Lenann McGookey Gardner Management Consulting Inc. in Albuquerque, N.M.

Plus, it's very difficult to raise prices once you've lowered them.

Salespeople need to get past the notion that customers are strictly buying on price, says Gardner, author of "Got Sales? The Complete Guide to Today's Proven Methods for Selling Services" (Jarndyce & Jarndyce Press, $29.95).

"You have to assume the vast majority of buyers, while concerned about price, are people that will buy in combination of price and other things," she notes.

 Added value
Keep in mind that people buy benefits, so if you're going to be able to justify your price, "you'd better be able to clearly articulate what the benefits of your products or services are," explains Jeff Goldberg of Jeff Goldberg & Associates, a Long Beach sales consultant/trainer.

And if they're still looking for some giveback, you can offer them added value without necessarily discounting, says Goldberg, co-author of "How to be Your Own Coach" (Serious Comics Press, $19.95). Throw in something extra that has value to the customer but that costs you little to nothing. For example, Goldberg might include an extra follow-up phone session in a client's package.

Similarly, a restaurant might offer unlimited refills, or a clothing store might throw in an extra accessory with a purchase, adds Rosalind Resnick, author of "The Vest Pocket Consultant's Secrets of Small Business Success" (CreateSpace, $24.95) and president of Axxess Business Consulting, a small business consultancy in Centerport and Manhattan.

The agreement structure may vary depending upon the customer relationship, says Resnick. For instance, she charges the "sticker price" to new customers but might offer a volume discount to long-term customers provided they commit to a certain number of hours.

The bottom line is if you're going to give something, you should try to get something in return.

"If you do cut your price, you must always tie a string to it," says Gardner.