Pricing isn’t a tool it’s the whole point of the game. If you’re afraid to discuss price your business is in danger. Here’s the gutsiest pricing strategy I’ve ever seen. Scratch the Value Itch!
The Gutsiest Pricing Strategy
I was sitting in a psychologist’s office. No, it wasn’t a therapy session. I’m certifiable but not dangerous. We were talking business. He was a professor at a local University and just starting a corporate consulting business on the side. I asked about his strategy for pricing and attracting business. He smiled, “I tell people that they probably can’t afford me.”
“Aaaa-eeeee-iiiiiiii-ooooo,” I worked my way through my vowels for a moment. “How’s that working for you?”
Put Price First
He was only able to devote ten hours a week to consulting, was booked solid for the next eight months – at $300 per hour. This was 20 years ago and he was pulling in $300 per hour! You have to believe I had some questions. Here was his strategy. He put price first and not last and addressed how much the client expected to pay. If the potential client was only fishing and didn’t have any resources the call ended quickly. If the conversation continued then everything was focused on what the client needed to happen and the business issues. Was this strategy crazy or inspired?
The Pain And Frustration Of Price Anxiety
Pricing is difficult, which may be why we tend to skip over it or push it to the last possible moment. Deep down there’s this painful price anxiety that we are either charging too much or too little. How many times have you delivered a proposal or a presentation and see the client take a look at the budget before you even get started? Houses, cars, investments – we know the price of every major purchase up front but we wait to the very last moment to focus on price in business. So get rid of the indecision. Just like any other part of our businesses we must manage price.
Priority #1 is to attract business that you can perform in ways that satisfy the customer, ensure repeat business and make profit for the company. If pricing is wrong, everything is wrong.
Scratch The Value Itch
Customers don’t just want a specific product or service. Most of the times they want to solve their pain points or business issues. They have an itch and are looking for a way to scratch it. They don’t want you to educate them on skin irritation and the development of your back scratcher – they want you to scratch.
Know Where To Scratch
What are the things that matter most to the customer, client or audience? The company or event organizer who gets the job, sale or attendance will be the one that achieves more of these goals than the nearest competitor. So your job is clear.
#1 – Determine the things that matter most
#2 – Deliver more of them than anyone else
#3 – Communicating the value you supply
What Do They Expect To Pay?
Notice that pricing isn’t a step? Clients, customers or attendees define value and, like it or not, they control price. Every pricing strategy boils down to this – what does the customer, client or attendee expect to pay? In my blog “Be Remarkable and Unforgettable – Stand Out & Get Noticed” I pointed out that all that matters is what people notice, remember and do. If they feel they have received the best value for their money they won’t remember the price.
If you’re at or under what people expect to pay it’s a fair price. Presto it’s off their radar and they don’t think about it anymore. If you’re over their expectation you have to pinpoint other value you are providing to justify the additional cost. If the cost of the additional value is fair then price is no longer an issue again. Just as long as they feel you aren’t taking advantage of them the price is cool – even if it is higher than what they expected at first. Look at it this way.
If you don’t get people to see, understand and value how you are providing more of the things that matter most – price doesn’t matter. You can practically give it away and they won’t care.
Doc Johnston’s Miracle Cure
So scratch where it itches and keep on scratching. Don’t suffer the pain and frustration of price anxiety. Take Doc Johnston’s Miracle Cure.
Deal with price first and then focus on providing the things the client, customer or attendee values the most.
The Gutsy Pricing Secret
Oh, back to the psychologist I was telling you about. I ran into him at the airport a couple of years ago after he was returning from three weeks in Europe attending a conference and meeting with corporate clients. He’s an Emeritus now, which is Latin for retired. We chatted about how surprised I was at his pricing strategy. He told me his ultimate secret.
“When I tell them they probably can’t afford me most people subconsciously think, oh yeah, I’ll show you I can afford you. They are determined to prove me wrong. It’s worked for over 20 years.”
His chauffeur and limo picked him up at the curb. He had made lots of scratch … the kind you fold.