Here’s a great paragraph from the chapter of my Negotiation text I was reading this evening:
We are all familiar, I hope, with how advertisements refer not to ‘low wages’ but always to ‘good prospects’, and how buyers speak not of ‘oneoff low priced orders’ but vaguely of ‘the possibilities of high volume purchases’. The ‘Chinese widget deal’ is an extreme example of the ‘sell cheap, get famous’ ploy. In this version the Chinese buyer places his demand for a low price in the context that there are a billion people in China. True, but the two facts of a low price and a large population are not necessarily connected. My advice is that if you sell yourself and your products cheap, you will get exactly what you demonstrate you think they are worth.
It’s quite interesting I came across this, as someone was talking to a friend of mine this weekend about wanting a special price for a product because he had 700 potential customers lined up. So, how do you deal with a potentially lucrative offer like this? Well, what we did was offer him a deal where he would have made a substantial profit if he really had 700 clients. Turns out he didn’t quite buy into it, which suggests that he didn’t really quite have 700 clients ready to take it on.
Don’t get me wrong, sometimes this ploy can help pull in customers in a way where they can try out your service. I can think of a couple of companies that do card printing who offer cheap or free introductory offers to get customers to try out their products. These are more than just ploys though, because they are quite transparent as to how their subsequent services are priced.