I have been working with a business owner who offers an excellent service, is reliable and gets very good results for his clients.
He generates plenty of enquiries for his business and converts them at a very respectable rate. Despite all this, his revenue isn’t where he needs it to be.
The main reason for this is that he doesn’t charge enough. He competes on price and therefore believes he can’t charge much more than he does currently.
I disagree. I have been encouraging him to increase his fees and better demonstrate the benefits and impact his service provides for his clients before discussing price. By doing so he could be significantly more profitable without doing any more work.
Unfortunately, too many businesses sell only on price when a little bit of effort and understanding can result in more rewarding transactions. We tend to think the customer is more price sensitive than they actually are and as a result we try to “transact” our offer for the price.
But the truth is that customers will buy on price alone, only when you give them no other angles to consider. It’s a lowest common denominator decision.
The good news is that you have the ability to shape the conversation and perception of value.
- If we sell on price they buy on price.
- If we sell on product (our solution), they buy on features and benefits.
- If we sell on the promise (the results), they buy on value.
- However, if we sell on impact (the difference it makes to their situation), it becomes personal and they buy on what it will mean to them.
Each layer is deeper than the last and gets progressively closer to the real desire of the customer.
A product or service can only be valuable in the context of a customer’s needs and wants. So the first thing we must do is understand this and sell to their needs and wants. Our offer must be positioned against their request, not against our need to “make a sale”.
Once this has been established, we can move on to show them compelling value. It’s only when they can see the value that they can buy it.
At least now they are considering your price in the context of value and from this perspective suddenly the price can seem smaller.
The key here is that you need to be able to articulate every one of these four levels. Don’t assume they will fill in the blanks for themselves. Spell out the solution, the result and the impact they will receive before addressing the price.
Keep the sale simple, make it about them, make it about value and don’t believe that customers only ever buy on price.
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