PricingBrew

Insights & Tips

Already a subscriber? Login

Become a subscriber and unlock an information arsenal focused on making your pricing efforts more effective.

No, Price Buyers Aren’t All Bad

As a consultant, Nelson Hyde of Holden Advisors always seems to be jetting from one client to next. But a couple of weeks ago, I was able to catch him on the ground long enough to record an in-depth interview called, “Exploring Four Different Types of Buyers“.

For nearly an hour, I got to pick his brain about the different buyer types B2B companies can expect to encounter in the marketplace. Specifically, we discussed four primary archetypes: Price Buyers, Value Buyers, Relationship Buyers, and the always-wily Poker Players.

Of course, Nelson provided a ton of practical insight around how to identify each of these buyer types, what they really care about, how to deal with them, and so on. But at one point in the discussion, I had to ask the obvious question:

Isn’t a Price Buyer an undesirable customer that you want to avoid entirely?

As it turns out, the Price Buyer is not automatically undesirable. Sure, they may not be as “sticky” over the long haul as a Value or Relationship Buyer. After all, they’re interested in getting the lowest price and are more prone to switching in order to get it.

But a Price Buyer can still be a profitable customer for you.

According to the Nelson, the real trick with Price Buyers is about identifying them in the first place and responding appropriately. It’s about knowing whether you’re really dealing with a Price Buyer, or whether you’re dealing with a Poker Player (a Value or Relationship Buyer who’s just pretending to be a Price Buyer).

Then, should you determine that they really are a Price Buyer, you can get to the price they need by stripping-out the value (and cost) that a Price Buyer really doesn’t care about anyway. And in this way, you can win the Price Buyer’s business while still generating profits for yourself.

So, the takeaway is this: Price Buyers aren’t all inherently bad. They do indeed have the potential to be profitable buyers. It just depends on you—your ability to identify them and your willingness to make profitable value tradeoffs.

Get Immediate Access To Everything In The PricingBrew Journal

Related Resources

  • Exploring Four Different Types of Buyers

    Nelson Hyde Interview Splash4

    To win a negotiation without giving up too much, it's important to understand who's on the other side of the table. This interview with Nelson Hyde teaches you about four types of buyers --- how to identify them and how to deal with them.

    View This Interview
  • Getting Started in B2B Pricing

    tut_getting started in B2B pricing

    This 8-part course focuses on the critical concepts that B2B pricing professionals need to know. Whether you're trying to figure out where to begin or just want to ensure everyone on your team understands the fundamentals, this course can help.

    View This Tutorial
  • Exposing the Power of Price Elasticity in B2B

    Barrett Thompson Interview Splash4

    Price elasticity is incredibly underutilized and often misunderstood. Barrett Thompson explains the nature of price elasticity in B2B and how you can use it to set better prices with far less risk.

    View This Interview
  • Are Revenue Management and Pricing Different?

    Amit Aggarwal Interview Splash

    Some practitioners will use the terms "revenue management" and "pricing" interchangeably. In this expert interview, Amit Aggarwal, the Executive Vice President of Revenue Management at iHeartMedia, helps explain the differences and why they matter.

    View This Interview