Quote for the Day
“It doesn’t matter how we got here what matters is what we do next”
Barry Eisler
Pricing
I was working recently with a client on pricing and thought it would make a good topic for my newsletter
Pricing covers a lot of ground so let’s start with the power of three otherwise known as the goldilocks effect
When asked to quote for a piece of work we professionals tend to quote a range say eight to ten thousand pounds. We are thinking of ten, but the client is thinking of eight. So, lets avoid ranges unless we can guarantee we will achieve the lower number
One way to avoid ranges is to use the power of three. What I mean by this is quoting three different fee levels on the basis of three different levels of service say Bronze Silver and Gold where Bronze for a basic service, Silver for the intermediate option and Gold for the best service possible.
Behavioral Economics experiments have shown that clients usually choose the middle option
The second thing I would like to draw your attention to is never compete on price alone. Compete on Value. There will always be someone out there who will beat you on price. I ask potential clients if they were buying only on price, very few admit it, and if they were I suggested my firm was not suitable for them
Give discounts if you must but build in a date or condition when they stop, for example Portfolio Valuation of more than £X in Financial services
Is your business able to benefit from dynamic pricing like the airline industry?
Finally, a question about your pricing policy. Are you reassuringly expensive or alarmingly cheap?
Growth and Profit Club
Please note that my next free Growth and Profit Club workshop on Zoom will be at 16.30 on Wednesday, 14 June 2023 and the topic is a Round Table discussion on Recruitment and Retention
Membership of my Growth and Profit Club will allow you to access other business leaders’ experience, knowledge, and wisdom, and share your own, helping to develop the expertise and proficiency of everyone on the Zoom video call.
If you would like to discuss the challenges and opportunities for your business or would like to join my Growth and Profit Club, please contact me on alan@mrwcs.com or phone 07860 813444.