12 'Stupid-Simple' Tips To Prevent YOU From Getting Sucked Into The "PRICE WAR" Game!

Today, I'd like to offer a quick change of pace.  Yes, we're going to continue building our "virtual e-store" together throughout upcoming lessons, but today I wanted to tackle a "TOO OFTEN" applied tactic most online merchants implement almost immediately into their "Game Plan" to try and increase their sales -- and most eventually realize it simply doesn't work... and fail at it miserably.

Truthfully, this one tactic is used by 99% of online stores...

Most seem to think....

• It's the "hidden treasure" of e-commerce!
• It will bring instant riches!
• It's a tried and true marketing strategy used for centuries that's a guaranteed winner!

Or so they think!...

Yes... many online merchants often think this one "surefire" tactic will have them instantly wearing diamonds -- but truth be told -- it's by far their worst enemy.

What strategy am I talking about?

"LOWEST PRICES!"

Forget about it...  Never consider it! (although you will -- at some point in time -- feel pressured to consider it yourself... guaranteed)  Just DON'T DO IT.

NEVER EVER consider lowering your prices just to make sales.

It's not only a surefire way for you to put your business into bankruptcy, but it's also JUST BAD BUSINESS PRACTICE online.

Yet so many online e-stores go for the "jugular" and lower their prices to absolute bare minimum profits hoping to be more competitive.

That's just plain dumb and I'll explain why...

Think about this...

Your competition sells good stuff....

You sell good stuff.

Your competitor's customer service is very good...

Your customer service is very good.

Their products are new and inviting...

Your products are unique and impressive too.

Sounds like an even battle...right?  So how do you make more sales without giving away your profits by lowering your prices?

Let's face it... We all know that competition online is enormous.

That's a "no-brainer".

But just assume for a minute that a lower price wasn't an option in your "game plan".

If you weren't able to lower your prices, how would you convey value to your customers?  What could you do as a salesperson to make your customers fall head over heals in love with you and ultimately GIVE YOU THE SALE... AT ANY PRICE?

Let's take this scenario...

What if you owned a nice cozy boutique down on the Main Street in your hometown?  A great location -- nice exterior -- bright red awning -- lots of traffic passing by -- free parking -- the trendiest decor -- HUGE neon sign out front -- the WHOLE NINE YARDS...

• What would you do to bring new customers in the door?
   
• What would you do to insure you made a sale once they were inside?
   
• Would you keep in touch with customers after they left your store?
   
• How would you handle those "Window Shoppers" who were just browsing?
   
• Would you display a "no questions asked" return policy in your store?
   
• Would you have a phone number your customers could call?
   
• Would you offer layaway plans... payment plans?
   
• Would you accept different forms of payments from customers?
   
• Would you offer your own "IN STORE" credit plan?
   
• Would you offer an incentive for customers who bring a friend by to shop?
   
• Would you offer FREE deliver on "Larger" items at no additional cost?
   
• Would you offer a free gift just for stopping by?
   
• Would you have "Special Sales & Discounts" for first time buyers?
   
• OVERALL... What would you do to make purchasing an item at your store a more pleasant and rewarding experience than from your competitors?

I hope you grasp the point here....

Just as with a "brick and mortar" shop, you need to apply the very same principles to your online store.  The actual steps that need to be taken to accomplish your goals might be somewhat different online versus a "brick and mortar" shop but the same basic principles still apply.

Undoubtedly, the BIGGEST hurdle you face each day in online sales isn't designing a flashy website or finding a million products to sell.  The biggest hurdle you face daily is YOU!  If you aren't consistently selling at YOUR PRICE, chances are it's because of something you, as a business owner, are doing less effectively than your competition. 

In other words....

YOU NEED TO BE ONE HELL OF A SALESPERSON!

I know... I know... My ears are ringing already!

When most people think of a typical salesperson they imagine a "pushy" used car dealer or an annoying insurance rep.  But those so-called "product-pushers" aren't really salespeople at all; in fact, with all their "cheesy" one-liners and borderline "unethical" selling techniques… most are no better than professional peddlers.

And then you also have the "so-called" salesperson who's really just a cashier in a fancy suit....

"Can I help you?" 

"NO!  I'm just looking, thanks!"

"Oh...Okay then.  If you need anything just let me know".....

AND AWAY THEY GO!

They're not really salespeople.... Are they?

Online... EVERYONE IS "JUST LOOKING", BROWSING, WINDOW SHOPPING, and KICKING THE TIRES!

That means... You really need to elevate your game!  After all, you don't have the same advantages online that come with face to face selling -- a pretty smile, an outgoing personality, etc. - so you really need to raise the bar.

You have to create opportunities and take advantage of every one.  Selling online isn't much different than selling face to face.  And there are a lot of "tricks of the trade" that you can learn to create traffic and bring in customers, but if your not a SUPER salesperson once you get the traffic, chances are, you'll eventually consider giving away your profits -- LOWERING PRICES -- just to make that sale.

DON'T DO IT!
 

The Phone Call From My Little Brother!

Let me tell you a little story....

My brother calls me at home from his place in Texas - his typical Sunday phone call - just to see how the kids were doin', get the scoop on the family gossip, rub it in about the nice weather down south (while I'm freezing here in PA)... ya know -- just to basically shoot the bull...

Anyway... In conversation, we get talking about some ongoing problems he's been having with his car (nothing new here), and he mentions that he finally got rid of it and purchased a new minivan....  FINALLY!...

But a minivan I'm thinking.... What gives?

He loved his car... A nice little black sports car he just couldn't seem to part with since his younger days (Maybe it has something to do with that mid-life crisis thing - the one Dr. Phil talks about on TV).

To say the least... I was a bit shocked... but not as shocked as I was when we delve a bit further into the conversation...

I really didn't think he would've ever parted with his car.  It was his pride and joy.  AND NOW A MINIVAN!

A FREAKIN' MINIVAN!

I'm thinking... What's this world coming to?  MY "HOT SHOT" BROTHER in a minivan... I never thought I'd see that day....

Actually, I'm just being a bit facetious about the whole thing....

In reality, him and his wife have a new baby on the way, plus they both like to travel a lot, so a minivan is definitely a better fit for them at this point in their lives.

...but I still had to twist the knife.. right?  After all, that's what brothers are for...

So there I am... harassing him about being the new "Soccer Mom" in town when he cuts me off and begins rambling on... telling me all about the hundreds of bells and whistles this vehicle has...

• A DVD player in the back
• a kick butt stereo
• 12 disc CD changer
• power seats
• power doors
• power this
• power that
• power everything

...blah...blah...blah.... He rambled on for so long about all the features that I'd swear it was a "ONE OF A KIND" prototype that sold for $100,000.

"It has this...It has that... And did I mention the leather

...blah...blah...blah..."

Of course, being the conscientious and caring brother that I am (a little pat on the back never hurts), I finally got a word in edgewise and asked him the altruistic question.....

"How much did it cost?"

C'mon now!... I'm his big brother... Of course I had to ask.  I wouldn't be the loving, caring, "best brother in the whole wide world" if I didn't ask.... Right?

Now here's the kicker...

What does my brother say?

"Hmmmmm....

I'm not quite sure what the exact total was....I'd have to check the paperwork!"

Now I'm practically on the floor.....

Alright then... approximately?  How much APPROXIMATELY...did it cost? 

Now... I'm thinking...

How much does a minivan with a million options - leather interior, rocket boosters, infrared laser beam navigation, auto-pilot .... can drive on land or water... yada, yada, yada, go for down there in Texas these days?

He says... "If my memory serves me correctly... I think it was around $34,000."

You think?  YOU THINK?

I couldn't believe he didn't know (right down to the nickel)...

I know I'd remember the exact amount if I purchased a new thirty something thousand dollar van!... But wait!  It gets better...

Now he hits me in the back of the head with a baseball bat.......

THE PRICE WASN'T THAT IMPORTANT TO ME TO BE HONEST!

I liked the van so much I would've spent $50,000 on it!

Okay...Okay...

I knew what he meant.

He was excited about the new van and he just wanted the damn thing.  I've been there myself.  I'm sure we all have.  I knew he wasn't serious about the $50,000, but I got the point.  So I continued to pry a bit (shame on me!)....

"Well, did you at least get a nice discount off the sticker price?"

Now, he totally ignores my question and says... "It even has a "built in" car seat for the new baby" Is that great or what?"

Then he goes on to say.....

"We were soooo lucky!  Our salesman was great.  Kim (his wife) is so excited because this van is going to be a godsend when the new baby arrives, and believe me, there's no doubt in my mind that it was worth every penny..."

And now his GULLIBILITY really starts to show...

He continues...

"AND talk about perfect timing... this model was the only one left on the lot.  They probably won't have another one of these babies in for months.  The factory can't truck em' to the dealers quick enough....

... If I didn't buy the van that day, another customer was coming in with a deposit to buy it that evening, so our salesman really went out of his way to help me put the deal together because he knew we really NEEDED IT... ( HE SAID NEEDED!!!)

... PLUS people are willing to pay top dollar with no discounts on these things.... They're ONE HOT COMMODITY RIGHT NOW!"

"PLUS...He gave me an unbelievable deal on my car as a trade...... "

"PLUS...PLUS... PLUS... PLUS...!"

I just sat with the phone against my ear (sitting on the floor now) and listened!  He went on and on about what a terrific salesperson this guy was.  Kim purchased a car from him a few years ago (she was referred by a co-worker) and he's always kept in touch with her to make sure the car didn't need servicing or anything. And to top it off... he always gives her his "Demo" car to use when the car was being serviced.  He's a really good guy.....

And then he asks me...

"What other salesman do you know that would do that?"

And he went on..."All of our friends buy cars from him because he really cares about his customers... even AFTER THE SALE - and that's really important.  Plus... he even went out of his way to convince his sales manager to throw in a lot of freebies for us - car mats, undercoating, a free oil change..."

"You know he really didn't have to stick his neck out like that JUST FOR US!  I can't imagine him doing that for EVERYBODY!  We'll definitely go back to him to when it's time to buy a new car. I'll recommend him to everybody we know!"

...... blah.... blah... blah.... blah... blah...

He continued....

"AND GET THIS... He gave Kim a $50 gift certificate at our favorite restaurant just for for bringing me in to see him......How nice was that?  He does that for all his customers who refer someone in to him!  That's really nice of him....isn't it?"

blah...blah...blah...blah...blah...

FINALLY, he stopped rambling and we finished our conversation. I again congratulated him on the new purchase (I was sincerely very happy for him....REALLY!) and I hung up the phone and just sat there thinking......

Now folks... PLEASE understand something.... My brother isn't a dummy!  He spent several years in the military to pay his way through college, then obtained a degree in software engineering, then ran a company in New Jersey for several years, then moved to Texas to run his own small business.  He really is an intelligent guy to say the least!

So he really had me thinking...

What makes an intelligent guy like my brother go out and buy a $35,000+ vehicle and not know OR SEEM TO CARE about the price - plus feel like he was treated like royalty, PLUS think he got the deal of a lifetime...plus...plus...plus...?

And then it dawned on me...

HE SIMPLY MET ONE HELL OF A SALESMAN!

It really is profound when you think about it.  My brother isn't a wealthy guy.  He and his wife save a good portion of their income towards their retirement.  They both live well within their means.  They both work their tails off to provide a decent living for their selves.  They're not in debt up to their eyeballs.  Basically, they're just average folks who work hard for what they have.  And from my observations, they (usually) make sound purchase decisions.

So... take a second and think about this "OH SO WONDERFUL" car salesman?

Here's a guy who probably makes $250,000 a year selling cars (where most car salesman in the area probably make about $50,000 a year).

What separates him from the rest of the crowd?  Obviously, from talking to my brother, he doesn't give these things away.  On the contrary, he undoubtedly holds a big profit.

When you break it down it's pretty simple....

1. My brother purchased his van from him because he was referred to him by someone else.
   
   Lesson: Setup An Affiliate Program... It's a must!
   
    
2. His wife had previously purchased a car from this salesman and had a great shopping experience so she recommends him highly to everyone.
   
   Lesson: Treat your customers like Gold and they'll come back again and again... and bring their friends!
   
    
3. All their friends buy their cars from this salesman.
   
   Lesson: Good service travels like a wildfire (especially online).  Bad service...EVEN FASTER
   
    
4. Their whole group of friends refer people to buy from this salesman.
   
   Lesson: Again... Word travels fast.  You don't need a huge advertising budget.  Just provide GOOD SERVICE!
   
    
5. This salesman follows up and stays in touch with his customers - Calls to see if they need him to schedule any service on the vehicle, etc.
   
   Lesson: Create a mailing list and KEEP IN TOUCH with your customers.  They're your lifeblood...
   your FOUNDATION!
   
    
6. This salesman goes out of his way to accommodate his customers who have already made a purchase in the past - The use of his DEMO vehicle when their car is in for service, scheduling their service appointments for them, etc.
   
   Lesson: Do something special once in a while for those customers who've already purchased from you.  They'll be overwhelmed with gratitude and at the very least... tell their friends!
   
    
7. He adds perceived value to his customer's purchases - (FREE floor mats, FREE oil change, undercoating) - even though the dealership probably does this for all their customers -- he looks like the hero.
   
   Lesson: Give your customers an offer they can't refuse.  Throw in some "Freebies" that cost you little or nothing and include them in with their purchase FREE!  The perceived value goes a long way....
   
    
8. He made my brother feel special - "He doesn't do this for all his customers.. He really went out on a limb for me on this!"
   
   Lesson:  Everyone wants to feel special!  Do things to make your customers feel special (and you don't have to lower your price to do this).  Repeat sales will surely follow...
   
    
9. He gave a nice referral bonus to my brother's wife for bringing my brother in - a nice gift certificate for dinner at their favorite restaurant.
   
   Lesson: Give your affiliates a valuable (perceived) incentive to send customers your way.  They'll be your best advertising....
   
    
10. He'll keep in touch with them to be sure there isn't anything else he can do TO HELP THEM OUT in the future.
    
    Lesson:  - Again, KEEP IN TOUCH with your customers through a MAILING LIST!  You're GUARANTEED another sale when they're ready to buy again....
    
     
11. He created urgency in the sale - "This was the last one left and someone else was coming in to put a deposit on it if I didn't take it"
    
    Lesson:  Offer "Limited Time Offers" and "Weekly Specials".  Your customers won't want to miss out on an incredible deal!
    
     
12. He built a ton of benefits out of the features of the vehicle - My brother couldn't stop telling me about all the bells and whistles this van had and how it would make his life so much easier when the baby arrived!  Quite frankly... most new vans probably have these same options available... but to him this van was a unique "One Of a Kind" SUPER VAN that he couldn't live without.
    
    Lesson:  Sell the BENEFITS of your products, not the features!  Tell your customers WHY a feature will BENEFIT them!  Customers buy with their emotions much easier than with their logic....
     

Do you see how a SUPER salesman uses his selling skills to create value in his product, create urgency in the sale, make his customer feel SPECIAL, that they not only "want"  but NEED their product, and yet still hold onto all the profit in the sale?

You need to implement those same concepts into your own business online.  Online, your business is just YOU!... YOU'RE THE SALESPERSON!  Ultimately, you need to be a much better, MUCH SMARTER, salesperson than your competitor..  The absolute BEST salesperson you can be!  The better salesperson always wins!  Don't settle... Take a proactive approach with your customers.  Don't wait for them to come to you!  That's when you'll see the BIG MONEY coming in!

My Final Thoughts...

Remember to always put yourself in the mindset of your customer.  It's your job to build as much "PERCEIVED VALUE" into your offers as HUMANLY POSSIBLE so that your customers simply can't refuse.

Ask yourself... What can I do to create an offer my customers simply can't refuse?  When you master this skill, I guarantee.... your profits will explode!

In closing, I simply wanted to offer you this interesting selling fact....

In recent surveys from online shoppers, the question was asked..

"Regarding your most recent purchase online, what was the key factor that influenced your decision to make your purchase from a particular company?"

The following answers ranked higher in their decision making than "BEST" or "LOWEST" price:

• Received A Promotional Email - (start a mailing list!)
• Portrayed A Professional Image - (build a nice website!)
• Seller's Reputation - (build your auction rating and provide exceptional customer service!)
• NO RISK Return Policy - (Make an offer they simply can't refuse!)
• Referred By A Family Member Or Friend - (Start an Affiliate Program!)

With all these factors ranking higher by online shoppers than "Lowest Price", do you still feel like you need to have the lowest price on a product to make the sale?...

I certainly hope not!

It's your life... and YOUR business! You control your own income!  Everyday, you should be brainstorming about different methods and clever techniques you can use to attract new customers....And remember....

Your website is your salesperson.....

• Make a great first impression
• Be a professional
• Show your personality
• Get your prospects contact info
• Give away some "Freebies" just for stopping by
• Keep in touch
• Get feedback
• Ask for referrals
• Gain their trust and establish a relationship....

So, until next time...

See you at the top,

David Nayavich
David Nayavich

P.S. I'd Love to hear your comments or any feedback about this course.  Please send me your comments to daven@dropshipper.net

Return To The Table Of Contents   |  Continue To Lesson 5