Last week, working with one of my private clients, we had to tackle the tricky subject of pricing. He was adamant that it was impossible to compete against cheaper prices offered by others in his industry.
If you have experienced issues with pricing too, you may be interested in a simple approach I shared with him.
It all boils down to the ultimate marketing question that needs to be answered:
“Why should I buy from you over anyone else?”
Not many business owners can truly answer this question satisfactorily, instead becoming locked into competing for customers solely on price.
So how can that that question be answered?
Having the right mind set is crucial. Often the reason you run into a price wall is down to the belief that every prospective client bases their buying decision solely on price and that a low price is the only way of winning a new client.
Clearly that’s not true. If price were the only factor involved we would all be living in the same type of house, hiring the cheapest low wage employees and shopping in the lowest price shops and that’s just not the case.
Low pricing can be a big part of a prospect’s decision to hire you if you let it be that way.
If you want to charge the price you are worth here are 3 common pricing mistakes you need to avoid:
- Marketing to the wrong prospects
People are willing to pay a premium for solutions to problems. If you are not communicating your message to the correct prospects – those that have problems and challenges that your services can help to overcome, you end up trying to persuade them to work with you based on price alone.
Think long and hard to find your ideal clients and position your business to attract them.
- Not being crystal clear on the value your offer
Many service business owners market what they do and their working processes. Future clients need to be clear on the benefits, results, outcomes and solutions that will they get from you. They will understand your value and why they need to pay more to buy your services.
- Not offering price options
It’s fair to say that one size rarely fits all. If you just offer one price option it’s a take it or leave it situation. Offer a premium and entry-level option with a mix of different benefits at different price points. I guarantee you will convert more prospects to clients.
As a rookie salesman I was mentored by a very successful senior member of the team. He taught me to lead with value then look them in the eye and tell them the price in a direct way. Don’t apologise as your services are worth the price.
There will always be someone that will offer a better price. Don’t let phase you. Apply these ideas and adopt a price equals value strategy that positions your good and services in the mind of your client as being too good not too buy.