Selling Goods or Services without Selling Yourself Short

Whether they’re millionaires or they live in a van down by the river, customers love a good deal. That’s partly why the local TV commercials for “Uncle Bob and Aunt Tammy’s Ginormous RV Super Center” that boast “prices so low, you’ll burst a kidney” are as successful as they are.

Of course, there’s selling, and then there’s selling yourself short. Too many entrepreneurs sell out early in the sales negotiation process. As a result, they don’t get what they deserve! This slice is all about what a lowly banjo taught me about optimizing your leverage at the negotiating table.

Click to tweet this: Let your customer play the opening riff in the “Dueling Banjos” of pricing negotiation. @DaveCrenshaw

Video transcript:

If your customers aren’t just a touch uncomfortable with the price of your product or service, odds are your price is too low.

I had an experience when I was about sixteen or seventeen, I had a banjo and I wanted to sell it so that I could get a better banjo. I took it into the music store and he asked me “How much do you want for this banjo?”

And I thought two hundred and fifty dollars because that seemed like a lot of money to me at that time.

He immediately said “Sold!”

It was a powerful lesson in my life because I realized I had undersold. I probably should have asked two or three times that.

So, how do you avoid underselling yourself? I recommend that you slow down in the selling process and let them share their first price. Or, if that doesn’t work out, aim for a high price. Then let them negotiate from there.

So my question for you is—are you underselling your product or service? Please share that in the comments section below.

Also, if you have a question you’d like me to answer in a future video, ask that below as well.

Thanks for watching. Now go close the deal.

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4 Archived Responses to “Selling Goods or Services without Selling Yourself Short”

  1. Nick Webb says:

    Probably underselling a bit… we sell a monthly recurring service. We do raise our prices about every year; promptly for new customers but updating for older customers takes some effort and gumption, I think it’s just about that time again.

    • Dave Crenshaw says:

      Hi Nick.

      Thanks for the comment. At the least, you’d want to stay ahead of inflation (so a 3% increase or more annually), plus any industry-specific costs that may have increased (like the cost of sugar for a candy factory). Of course, you’ll also want to stay competitive with competitors. Neither too low nor too high. Then you’ll want to consider how you can add more value at the same time you’re increasing the rate. Better reporting? App? Etc?

      In terms of raising rates on existing customers, that’s a delicate one. Probably a topic of a different video or more involved discussion. Personally I never raise my monthly coaching rate with customers under contract. I view this as a bonus to them to reward them for their commitment, as well as a small price to pay for their loyalty. I find my long-term customers more than make up for any additional money I could have received via referrals.

  2. Adam says:

    Hmmm. I don’t think that I’ve found this sort method or thinking to bring anything other than uneasiness into my mind. It leaves you wondering, “could I have taken them for more?” This is why everyone walks out of a car dealership wondering if they paid too much. I would rather live by the “what is it worth to me?” mindset and sell/buy for no more or no less. In my business, I see a lot of happy, returning customers because they know they’ve not been squeezed for every last penny or bamboozled in the transaction.

    • Dave Crenshaw says:

      Hi Adam. I can see why you might interpret my advice this way. However, if you knew me and they way I operate, you’d know that’s far from what I intended. Perhaps this exposes the weakness of the 90-second or less video.

      What I see far too often are business owners who are over-eager to make a sale…any sale. The result is that THEY get taken, not even by other people, but by themselves. They get into a price war with their own mind and insecurities, rather than asking for fair market value.

      For example, I have a friend–an outstanding speaker–who regularly raises his rates aggressively. In the beginning, I thought he was crazy and perhaps delusional. Then I realized that I was projecting my own insecurity. In fact, rather than getting less business because he raised his rates, he got MORE bookings and worked with increasingly better clientele. Because he had the stones to play big, his speaking business went big time. His example opened my eyes to realize that I was playing it small, and it’s encouraged me to grow my business.

      As another example, with my first book deal, I was SO excited to get an offer from a publisher that I was ready to take the first offer. Thankfully, I have a wonderful agent who said that they were under-bidding. He went back and negotiated for a more reasonable royalty, which was better for both parties and created a more balanced relationship.

      Do some people take advantage of others? Yes. Yet I find that to be the the minority among business owners. More often they sell themselves–and their product or service–short. Businesses that do this often hit a plateau and stay there. Not because they aren’t being greedy, but because they have a limited perspective.

      Certainly a balance needs to be struck. My apologies if I gave any other impression with this short video.