Is Your Price Right?
How about quality?
Posted by Jacky Sherman on 06/07/2022 @ 8:00AM
If you're a regular reader of my blog you will know that I will say your price depends on who you want as your ideal client. Who will earn you the most money for the least possible hassle?
So how do you make yourself attractive to those types of people? In marketing terms, how do you position yourself in the total market for your services? A useful and much-loved tool marketers use to analyse your market is the Boston Box, or Boston Matrix.
Here's one that I use to help my clients decide what they need to do to position themselves to command the best price for their services. Before I work through the boxes, let's define the parameters.
So where would you put your current offering? Let's work clockwise around the box starting with the bottom right box.
Low Quality/High Price
I'm sure you don't need me to tell you that the closer you are to the bottom right corner of this box the less likely you are to win any clients at all! If you're not closing sales, not getting referred, or in front of clients from other means, this is where to start asking yourself some serious questions.
How are you presenting yourself to your contacts and prospects?
Does your image match that of your prospects?
Are others seeing you the way you see yourself?
Do others in your network see you as referable?
How would you know?
What are your (rare) customers saying about you?
Are you getting testimonials?
What about the people who choose not to give you a testimonial, what are they saying about you?
The only way to really answer these questions is to get an external perspective. So who do you know who can give you honest objective feedback? Are you prepared to listen and act on the results? The temptation is to just lower your prices, which puts you in the next box.
Low Quality/Low Price
Remember that my definition of quality is to exceed your customers' expectations. Customers paying very little may expect very little in return. Now initially lowering your prices without addressing quality may work, but is rarely sustainable. So there are a couple of things you need to check:
Are these new clients still your ideal clients? If they are prepared for you not to meet their expectations, then are they likely to mess you around as well? Ever had that client who forced a huge discount out of you and then spends the rest of your relationship being late supplying you with information you need, cancelling appointments, not returning your call and being late paying you.
Are you getting repeat business or client referrals? Low prices usually mean you need high volume. If you are not addressing the quality, but are a slick salesperson you may win new customers, but your customer retention, repeat business and client referrals will be low. And that is just plain hard work! In the worst case, you are entering the land of the charlatan where ethics take second place to the sale.
So if you address the quality and undercut the opposition, isn't that the place to be?
High Quality/Low Price
This is a great strategy if the goods or services you offer are easy and quick to deliver to a high quality and the customers' expectations are straightforward and manageable. Some thoughts before adopting this strategy though:
Make sure you truly understand your numbers and you are clear about the expectations on both sides. It's really easy to be busy making a loss.
Price can be part of your customers' expectations. Clients who offer high value services themselves expect to pay premium prices and therefore may be suspicious if they consider your price too low.
I work a lot with consultants and boutique service providers where the owner is an integral part of the service delivery. Their income is limited to the hours they are available to work. To grow, they only really have three options, all of which affect the price. They can delegate non-client facing roles to others, scale-up and train others to deliver on their behalf or raise their prices.
So why not aim at the top of your market?
High Quality/High Price
To command the best price you need to present your business as a premium product and consistently exceed your customers' expectations. So what's stopping you?
Usually, the clients who will pay top prices can be harder to access. They may be fewer in number, harder to identify or more elusive in calling. So you may lack confidence that you can win enough of these clients.
Here is where applying some strategy to your referral marketing really pays dividends. Who in your network offers a high-quality product at premium prices? These people know the sorts of people you want as clients and they are people that you can confidently refer to your clients too.
So my referral tip this week is to 'network up' and position yourself to offer high quality services at the top of your market:
Make a decision about what kind of clients you really want to work with.
How do your prices compare to others offering solutions for the same customer needs.
What would you need to improve to command the top price in your market?
Who in your network can refer you to the sort of clients who are willing to invest at this level?
Do you need to re-think your networking to meet more people who know these types of clients.
It can be hard to be objective about this with your own services, so who do you know and trust that can help you with some honest feedback and advice?
After reading this blog post, you may now feel that could be me.
Until next time ...
Would you like to know more?
If anything I've written in this blog post resonates with you and you'd like to discover more about deciding if your price is right, it may be a great idea to give me a call on 07970 638857. Let's have an initial chat over a coffee and see how I can help you.
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