How to beat your competitors with your higher prices

Heads I win, Tails I win again!

Higher prices might mean more success for you.

Author: Daniel J Bockman

Main Idea

With the cost of everything going up these days, you have to change up your game to stay competitive. Here’s how to become even more successful even during the high priced markets we are experiencing.


We’ve all seen this game. The price wars of commodity style pricing. “Buy now and save later” or “One sale today”, and of course, “BOGO.” Americans are addicted to sales and businesses know it. Think about how the concept of Black Friday got started? Car companies have been doing this for years with all the closeout sales to make room for this year’s models!

Even I got into this game at the beginning of my business by offering coupons for my customers to save a certain percentage by booking a project early. But I found out very quickly that there is no bottom to this thing.

One of my former employees had the idea of plowing snow for customers as a second source of income for our company. I told him that was fine but that I did not want to do the work. I agreed to put together snow plowing contracts with customers if he would run that side of our business. The very first contract I put together I priced our trucks and equipment at $55/ hour. The customer was content with that price and we contracted the work. A few days later the customer came back and said my bid had been undercut by another contractor and that they were going with them. I asked how much did they bid? He said $54/ hour. One dollar less per hour to get the work!

I realized right then that we could play this game all day and it was going to be a huge waste of time and money. “I’m out!” I said and we trashed the snow plowing game.

Since then I decided that I was going to compete with others based on quality and craftsmanship rather than on price. My theory is that if you out-work your competitor, you can keep your prices what you want and even name your own price. The beauty of this is that there are no penalties to out-working your competition. There are no laws against it or regulations on blistering levels of work ethic, innovation, or creativity. Keep you prices high and deliver more than your competition is my motto.

Here are the results of this theory once I put it into practice. I am basically beating my competition with a higher price sheet. This means I am undermining what most contractor use to win a sale, – lower and more affordable pricing.

Simon Senik says in his book, Start with Why, that “people do not buy what you are selling, they buy why you are selling it.” This is a dynamically different way of thinking when it comes to pricing your products and services. Communicating why you are doing this business over what you are doing this business for, changes the perspective the customer has on you. Every customer knows you are not doing this for fun, they know you want to make money. But by replacing the profit aspect with the “why I’m doing this” aspect, you begin to look more serious about your work. You are saying that the project or your sale is far more important than the money you will be making. You are making the customer feel more important.

You also look happy in your work. If you approach a customer with the attitude of joy and happiness and that you truly enjoy what you are doing, they feel you will deliver much more than you promise. Here’s what I mean. I just go this email from a customer that we are now contracted with:

“Thank you for your patience!  I received the last of my quotes yesterday, and after sleeping on all of them for a night I’ve decided to accept your offer for my privacy fence if your schedule still permits.  I appreciate everything you’ve done to work with me, a factor which weighed heavily on my final decision. You were definitely the most expensive choice but the work you have put into this shows me it will be well worth it”

Diana L.

Now ask yourself, If you were my competitor, how are you going to beat me at this game? Lower your price all you want but she’s still going with our contract because I out-worked you. I will deliver more because the value, the details and the customers’ needs of the project far outweigh the money I will make. She sees that!

Sure, my prices are going to drive away some customers. A few years ago I even had one guy say I was going to price myself out of business. Well, not only am I not out of business, but my business has grown since implementing a “why we do this” aspect. Maintaining a premium price level is also a win-win situation. Here’s what I mean. My prices are going to drive away customers that probably do not fit our ideal customer profile. It’s 80/20 in action. We put 80% of our time into 20% of our customer base.

Losing a bid is not a bad thing and plays into another concept we have developed called, “Win when you’re winning and win when you’re losing.” Heads I win, tails I win again! I once met with a customer who really wanted our services but was not in a financial position to have our level of quality and service. The guy was so nice about it too! He said that he felt bad that he could not go with our contract and that he could only afford a cheaper contractor. He also mentioned that he could tell we were the very best by how hard I worked to earn his business. Later that week I got a call from a friend of his. The guy referred us to someone he knew that was more affluent. Turns out that new contract with his friend was bigger and more in line with our style of business.

With all the success I have created by having a premium price list, the one thing I have learned is if you’re going to price yourself as the best, you better damn well be the undisputed best at what you do! There is no short cut to being the best. You have to do the work and do it better than anyone else in the business.

You have heard all the complaining about iPhones being priced at $1200. People say, “Why are they so expensive, who would pay that much for a phone?” Here’s the answer to that, – because there will always be someone willing to pay premium price for things if they think it’s the best. This is a little known secret that business owners use. They know there will always be customers willing to pay premium level for premium service. The trick is to have the discipline to be steady and hold your ground.

There is a market for virtually anything as long as you know how to package it and understand a few simple aspects to human nature and influence.

  • Scarcity drives up price. This is a simple law of nature
  • Happiness wins most sales. People generally like being around happy and optimistic people
  • Be candid with your prices. Let customer know upfront you’re the highest but you’re the best
  • Outworking other people. There is no substitute for work, outwork your competitors in everything!
  • Be consistent. Do not get known for pricing high but folding on your price later
  • Learn to walk away from a deal no matter how good it looks if they don’t agree with your price
  • Say no. There are just going to be people you can’t work with, say not to the not ideal customer
  • Deliver more than you promise. Your reputation will be outstanding if you can do this
  • Make the sale personal. Make the customer feel like they are the most important people you are working with (this is pure gold!)

Try some of these simple principles in your next business sales and see if your customer will agree to your pricing. Fight the impulse to lower your price just to get the sale. Like a boxing match, there will be other rounds that you will win.    

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