I recently did this live rant on my Facebook page:
I encourage you to watch this before reading this blog. And remember the famous quote: “Price is what you pay, value is what you get”. Then I will answer a few of the common questions I have got in the comments below.
Is the customer always right?
I don’t think we’re in an age, where the customer is always right. I don’t think the customer can act like, demanding, entitled twats like we’ve all acted in the past. And I’m not saying this, because I don’t think my client should be like that with me. I’m saying that because we’re in a social media world now, where everyone’s got an opinion. It’s very easy for information to be passed freely. So, I think we should be respectful of providers even when we are the clients. We’re not always right as the clients.
How to position yourself to the right customers
So, you want to think about positioning of who you’re trying to attract and price accordingly, up your prices probably. A lot of people are scared about upping their prices, because they’re worried about losing clients. But you’ll probably only lose the clients that you want to lose, and those clients are taking space. They are filling a vacuum and a void, which if were empty, would attract a higher type of client who would want to pay 20 quid for a tenner, or who would pay fair exchange value, who perceive good value, and then wouldn’t bug you and drain your overhead.
If you sell products and services, you want those customers to go to the high volume, low margin providers. Audemars Piguet and Rolex don’t want to attract Casio buyers.
Price vs. Value
You can pay full asking, over the ‘price’, but it can be value to you, because YOU know what it is really worth. Or you can change the use.
One thing I’ve learned in nearly 2 decades in property is that prive and value are VERY different. And BMV is also not always what it seems.
You can pay 15 to 20% BMV and actually OVER pay.
You can buy BMV and get a deal, You can pay full asking and over pay.
So, instead of chasing price, & BMV, chase VALUE. VALUE to you. You always make the money when you BUY, as much as when you sell. So know the value to YOU. See what others cannot.
When potential customers lead in asking about price first, before knowing about the value, relevance & utility of your product or service, and before knowing you, then you are set up for failure no matter what you say:
1. If they think it is cheap, then they think it is cheap
2. If they think it is expensive, they will always think it is expensive (they can’t unseen the price & unfeel their first feeling of shock)
Should you tell your customers your prices?
The first thing most potential customers want to know about your product or service is the price. Especially the price shoppers & bargain hunters, but even those seeking value over price will likely ask. Should you tell them?The first thing most potential customers want to know about your product or service is the price. Especially the price shoppers & bargain hunters, but even those seeking value over price will likely ask. Should you tell them?
I made this mistake recently. Someone direct messaged me, apparently knowing nothing about my services, & asked how much my mentoring fees are. This happens many times a week, & I usually ask a few qualifying questions first. As I have a waiting list, I broke my own rule, and told him directly.
He replied with letters that expand into swearwords and said “that’s how you can afford a Ferrari!”
That was the last I heard of him.
Now, he did nothing wrong. I did nothing wrong. He asked a fair question & I can have direct, no fluff, honest answer. That should be enough to win business, right? It’s all about integrity. Well actually no, not in this case. Because I have not read from him again I could have in fact pushed him completely away. So in this instance I should have answered what I felt was right for him, not what he wanted.