By Mark Creedon
Why price is about you and not your client
Have you ever wondered how it is that some businesses are just able to charge more?
Do you wish that you could increase your prices and not lose business? I attended this great session with Taki Moore recently where he spoke about the things that hold us back from reviewing and increasing our pricing.
Fascinatingly, the biggest things revolved around our own internal dialogue rather than the mindset of our clients.
Here are four assumptions you’re probably making right now that if changed, would pave the way for objective price review and increase in your business.
They won’t pay more
Jay Abrahams says it is arrogant in the extreme to assume that someone won’t pay more.
Your clients may not pay more for what they need but they will pay for what they want. Taki shared this story about a coach who went to see some clients and signed up for his coaching program.
When he returned for the first session the next week, they had sold all the furniture. He asked them what happened, and they told him that they had sold the furniture so that they could pay for his coaching.
He was immediately apologetic and wanted to refund the money. However, the client challenged him by saying “how dare you to tell us what our definition of ‘whatever it takes’ is”.
If clients want something badly if you can show them that the service or product that you provide is something that they want and if you can convert their need to a ‘want’, then the price becomes largely irrelevant.
So, the trick is to position what you sell as a want and not a need.
Think of it in terms of the cost of inaction and return on investment. In other words, what does it cost them in the short and long term not to do business with you?
What are some of the possibilities of them working with you? If you can frame the cost of inaction and the return on investment in a compelling fashion, then the service or product you provide will suddenly become a ‘want’.
Price is about your ego or your self-esteem
A few years ago, I met with a potential coaching client. We sat across the table at a coffee shop as I got to understand his business and what it was that he needed.
Once I had a clear picture of what he needed and how I could help him I began to close the sale.
I told him what the cost of my coaching would be, and he reached out and shook my hand and told me we had a deal.
He then proceeded to ask me if a handshake was a solid deal. Of course, I replied that it was. He then looked me in the eye and said “Mark, you’re too cheap”.
Wow, what a belt between the eyes. He saw the value in my coaching that I didn’t. I knew that we could help him to achieve his objectives and to reach his goals, but I didn’t make the all-important causal link between price and value.
Instead, I was so focused on price that it was all about my level of comfort, my self-confidence. I wonder how much your level of self-confidence is stopping you from charging your true worth.
The price must be justified
I recently put my car in for a service and when I collected and paid the bill, the mechanic gave me a very long list of itemised expenses including how many litres of oil and the cost to dispose of the old oil.
I didn’t really care about all those individual pieces because that’s not my motivation for the service.
The reason I want my car serviced was for peace of mind. I wanted to know that the car would work for me every time I started it.
I wanted to know I wasn’t going to be stranded on the side of the road and I wanted to know I wasn’t going to do long-term damage to the engine.
That’s the value that I saw in the service, not the individual cost of oil per litre or brake fluid per litre.
Are you justifying your price? Are you failing to identify the true value, the transformation, or the outcome that you deliver through your product or service?
Price is immovable
One of my Mastermind clients recently asked me how he would increase the price of the service.
He provides a great service to his clients and gets amazing outcomes for them, but he needed to know what the process or the formula was to increase his basic price.
It’s not a complicated process. It is in fact way easier than you probably think.
Price is just a word. It’s like asking what your favourite fruit is. Today you may say apples but tomorrow you can say oranges, you can change your mind because it’s just a word.
Price is no different I told him that the next time somebody asked him for the price, he simply has to change his answer from the old price to the new price. See how simple it is?
Of course, there are considerations around market competitiveness and meeting the market to consider.
The reality is though if you can position your product and service so that it is a want, that focuses on outcomes and transformations so that it’s an absolute no-brainer for your clients then price becomes the easy part.
Got you thinking about your pricing?
Mark Creedon is the founder of Business Accelerator mastermind by Metropole and business coach to some of Australia’s leading entrepreneurs – helping them build a true business, not a job.
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