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Determining Price

Posted by Doug Davidoff

Jan 25, 2010 8:52:10 AM

Whenever people buy from you, they are buying two distinct components.  First, they are buying the “commodity” you are selling (and let us all remember that, at the end of the day, we sell a commodity), and they’re buying an “X-factor” from you.  I call this “X-Factor” your intelligence.  It manifests itself in a variety of ways, but fundamentally, it comes down to how you do what you do.

Determining the price someone is willing to pay for something is actually quite simple.  Take the commodity value (which is pretty consistent and easy to assess) and add your intelligence value.

So, the next time someone doesn’t pay you the price you want for your products and services – understand that what they are saying is they don’t value your intelligence, or your X-factor.  And that means one of two things:


  1. You are overestimating the value of your intelligence, or

  2. Your prospects are undervaluing it


If the first is true, you can either lower your price (not recommended as I do not believe this is sustainable) or improve both your intelligence value and your ability to communicate (read: enable your prospects and customers to understand) it.

If the second is true (and my experience shows that it usually is), then you need to improve your ability to get prospects and buyers to understand your intelligence and the value it represents.  Stop focusing on all of the stuff you “do” and instead enable buyers understand what your intelligence means.

My next post will center on a key approach for doing just this.

Topics: B2B Sales Strategy, Sales Training/Coaching