Price! What To Do & Not To Do

Price! What To Do & Not To Do

01/10/2024 by

Gail Biddulph

The topic of price raises its pretty head time and time again.

It can be full of thorns or one that brings endless smiles.

What I’ve noticed is that business owners know a tiny fraction of what there is to know about price.  And, is it any wonder because the focus is on getting the work at any price.

I used to be the same, until I really dug into the details.

I was on such a steep learning curve to start off with.  My focus was elsewhere.  Then I questioned what was going on with price?

I pursued the topic of price with vigour.  And discovered gems lying beneath the words.  I analysed their words and the truth was revealed to me.

What I’ve got to say here is really valuable.  As you read it, please keep in your mind that price is not a topic to be thought about on its own.  No siree!  It links perfectly to what you have already learned in these 46 Ideas about transactional and relational clients.

First off… remember, relational clients do not buy on price alone. 

Consider this…

Price is elastic.

 Let me ask you a question.  What do you think people consider most important when deciding to buy something?  That something could be your services or an everyday purchase, or even a once in a lifetime purchase.  Well, there are lots of factors.

Price is not the deciding factor.

After making a decision, people may use price as a justifier.

The number of people who purposefully buy cheap are in the tiny minority. 

Consider this…

Dacia Sandero is Britain’s cheapest new car selling at £5,995.  In 2017 5773 cars were sold in the UK giving them 1% of the market share.

At the other end of the scale is the Mercedes S-Class saloon.  It is £187,240.  In 2017 3339 cars were sold in the UK.  They claimed 31.8% of the luxury car segment.

If everyone bought on price alone we would all be driving Dacia’s.

We can extend price comparisons to shopping – are you Primark, John Lewis or Harrods?

I’m sure you get my point.

The key to remember is people buy at different price levels at different times.

Here is a valuable question for you to ponder…

Do you give your clients an opportunity to buy at different price points from you?

Call it premium or deluxe pricing.

And people may want different price points from you at different times.

Another question for your Actions today…

Action:

  1. Think of ways to “deluxe” your product or service.  Can you do it faster?  Can you do it at different times of the day?  Time poor, cash rich people will pay a premium to get what they want when they want it.  No questions asked!
  2. What extra could you add to your product or service?  This is the part where you can add more of “you”.
  3. I know you will have heaps of valuable information that your clients will love.  How could you possibly share all that with them?
  4. There may be a tendency for your fear feelings to surface because of thoughts associated with giving away your knowledge.  Give away your knowledge and your clients will disappear too.
  5. Let me burst that bubble, because it simply isn’t true.
  6. When you stop competing on price and shift your mindset and heartset to delivering value by the bucketload you’ll discover your premium clients’ needs shift too.

Consider what they love to do.  And one thing they love more than anything is to tell their friends how fantastic you are.  They’ll probably say in a hushed tone that you’re on the pricey side, but you are worth every penny.

Before you ask… yes I have different price points.  Remember I walk my talk!  I offer these ideas, my workshops, my products and my Inner Circle subscriptions where people get oodles of value.  But if you want a really personalised approach, where I dissect every facet of your business and wring every ounce of value out of everything you do, you pay a premium for that.

Please keep in your mind, there is only one of you.  Nobody else has your life experience plus your knowledge and technical experience.  Nobody!

Do not get into a price slashing war.

It’s a dangerous game.

You are not a commodity.

You are worth more than the low level, scraping the barrel subset of the population.

And a word of caution.  If you do choose to compete on price, think about the spiral down effect.  You slash your prices, your competitor slashes theirs, your slash yours.  The spiral can only end in one place and that is in business ruin.

Please do not consider what other people do and what is “normal”, because that’s about positioning.  If you want to compete for the same clients as somebody else down the road, I’d urge you to think again.  You are not them.

You are unique.

Revisit your ideal client.

When starting in business, pricing can be little more than sticking a pin in a map and hoping we arrive at the right destination.  Roughly the same as everyone else, that’s the price most people charge.  You probably did that – maybe you still do?

We look at what other people charge, mentally compare ourselves and based on how we feel, pick somewhere near’ish!

That’s not a good pricing strategy!

Remember when I said you want relational clients, this is what I was talking about.

Relational clients want their problems solved, fast and they will pay for it.

I bet nobody does exactly what you do.  That means you don’t have any competitors!  Hard concept to grasp, I know.

You are different and your business is different from everyone else.  No other business has you!  Competition only occurs when you are comparing like with like.  Which means direct comparison is impossible.

With that firmly in your mind, wave goodbye to price buyers and say hello to more clients who truly value what you do for them.

Do not fear price, embrace it.  

Now for more Action…

Action:

  1. Refocus on your target clients.  What are they already spending their money on?  How will they value your services and what you offer?
  2. What is their biggest problem you solve for them?  How much does that problem cost them?  By comparison how much do you charge to solve it?  Without contrast everything is either cheap or expensive.
  3. Look at your pricing again.  Be clear about your contrast.  Have it engrained in your mind.

 

If you want to increase your profits, then put your prices up by 10%.  Most of your clients won’t notice.  If they do notice and they are your new type of client, they won’t mind.  They want you to be successful too and they know they have to pay for excellence and value.

Pricing and positioning are fundamental to the success of a business.  This idea has been lengthy and I make no apology for that!  Soon I’ll be exploring the real cost of discounting.

‘til then, get your head around price increases!

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