It’s a fact: People will only buy from you, if they believe that the value of your product or service (herein called a service), is significantly higher than its cost to them. If they believe they can get better value (or a better deal) elsewhere, they will go and spend their money somewhere else.
Equally, if people think after reading / listening to your marketing that you must be out of their price-range, they won’t even get in touch with you.
You need to know how to strike the correct marketing balance and that’s what this article is all about!
Effective marketing works on a number of different levels. For example, it should show people what a great service you provide and also reassure them that your prices or fees are set within their range. You achieve this by pumping massive value into your services, PLUS showing that people, just like them, are already using and benefiting from your services.
For example, when I market my services, I have to make sure that people know that I work primarily with small businesses and that my fees are easily affordable to them. Otherwise, I risk people NOT calling me or emailing me for more information, wrongly assuming I’m out of their price range!
Getting your marketing balance right
To find out if you have got your marketing balance right, you will need to measure the quality and quantity of the responses you get. If people often tell you they’re surprised at how expensive your price or fee is, it means you need to pump more value into your services.
Yes, some people will say they think you are expensive, just as a way to try to negotiate your fee down – and you will always a get a few of those; but if this response becomes regular, it’s usually an indicator that the perceived value of your service is too low.
Another indicator that there’s a problem with your marketing balance, is if prospective clients start asking about your price or fee, early into your first conversation with them. When this happens, it usually means you are either marketing to the wrong crowd or you have caused them to think you are probably out of their price range. When people think your price / fee is likely to be great value or nominal, they are less concerned about it and more interested in how you can help them or how your service works etc.
How to make testimonials work!
One of the ways I demonstrate both the value and affordability of my marketing services, is to provide testimonials and that’s what I suggest you do too - but not just ANY OLD kind of testimonial!
YOUR testimonials need to show the value and the affordability of your service.
Most testimonials I see, are from people simply saying how great, professional or effective a service provider or product is – which is fine – but only if it’s clear that the people giving the testimonials are just like them. This way, the reader can relate to the message and ‘see themselves’ in those testimonials!
For example, the testimonials I use are all from people who run small businesses or are self-employed – who are elated at how I’ve helped them achieve fantastic results. These are the same kind of people I market my services to. This means that these testimonials tick both boxes; showing the value and relevance of my services.
What next?
Take a look at your current marketing feedback and see if you can spot a pattern. If you find people are often too fee-sensitive when they respond or that you do not get as many responses as you would like, take a look at your marketing balance.
This is obviously a big subject and there are dozens of elements to consider, if you want to blow the lid off your sales and profits. I will be addressing all these in future articles / blog posts.
Over to YOU!
What tips do YOU have, to overcome prospective clients or customers that are fee-sensitive or too price focussed? I would love you to share them with the readers and myself!
Hi,
Great tips.
The first one I was familiar with : boosting your value or offering something extra that could compensate for a higher fee(I don’t like reducing my price but I’m always open to offer something extra).
But your second advice I think has bigger value to me. I didn’t knew that if people start asking really quick about the price they’re scared to hear a much more bigger fee that they can afford. I’ll keep that in mind, so if it happens at least I’ll know how to react.
Thank you
Can we relate this marketing balance with blogging and traffic? Do we have ‘price’ in blogging?
Please correct me if I wrong, the content of the blog is the value, while the readers/visitors is your market. Where should I put the ‘price’ element in blogging?
Toma,
Fee becomes a primary concern when the value is not evident OR you are marketing your services to the wrong people.
I’ve noticed that the main issue my business has isn’t the pricing – its that people don’t follow through. They say they love the service and want to do it, and then nothing happens. Its very consistent. We offer limited free service for those that want to sign up and check it out, but they still don’t seem to take advantage of it.
Cliff,
To give you an answer as to why that’s happening, I would need to know each step of your marketing, in detail.
However, there is clearly ‘something’ that makes NOT signing-up more attractive to them than going ahead.
Ask questions, go back to people and ask them, for research purposes, what it was that caused them not to proceed.
Look for common answers – That’s a place to start.
This is a great topic and you are right on target. Can’t wait to read your subsequent posts on the topic!
This is one of the reasons that relationship marketing is critical- word of mouth referrals from previous and current clients lend you instant credibility.
Jennifer,
You make an interesting point. Thanks for the comment.
Jim,
As always you are right on target. I have not yet begun to really start marketing but now I will know what to look for and how to address some of the issues that arise. Additionally, getting back in touch with customers who do not purchase and asking why is a great idea. It never even occurred to me.
Thanks again,
Lisa
Lisa,
Glad you found the post useful. Sometimes, the information in the comments section here is just as good as the post!
Excellent advice – can’t wait to see more posts on this subject. What do you think of the theory that people tend to purchase based mainly on emotion and then rationalize their decisions afterwards? I subscribe to that theory myself and believe it’s one reason the right kind of testimonials lead to sales – it helps ease emotional discomfort with the purchase process.
Russell,
What a GREAT question (this is why I LOVE the comments section of the blog!)
It’s a fact that to make a purchase, someone needs to be motivated.
The term motivation comes from 2 words; Motive & Action.
When the motive is strong, the action follows.
Thanks again for such a great comment Russell!
Jim, great post to start another great conversation!
I’ve had clients both overprice and UNDER price their products. There are plenty of people out there that believe an inexpensive product must be a CHEAP product. It really is all about the value (price vs benefit).
Also, I’ve found that many people are still skeptical of buying something online… there isn’t any permanence to a website. But good testimonials can help overcome that issue. I always recommend people make their testimonials as rock solid as possible by including at least 2 pieces of identifying information (ie: name and city, state or name and business name, etc.). Don’t give anyone reason to believe that your testimonials might not be real or you’ll undermine your your product and yourself.
Jared,
I think the success of online retailers like Amazon, confirms that people will happily spend money online, providing the marketing addresses the customers core issues.
When it comes to price points, I tend to believe having the highest price is actually an advantage when selling services moreso than when selling products. If someone is buying a service, they are probably not an expert in whatever the service field is or they wouldn’t be shopping for that service. This means they have no way of really comparing service before purchase other than price. The thinking generally goes – well, if their price is considerably more, their service level/expertise must be that much greater than their competitors, I’d be safer/smarter using them than a cheaper alternative. Of course, there are always price shoppers as well, so there is a place for so-called “bottom feeders” too – the place you absolutely don’t want to be is in the “deadly middle” ground of prices. More expensive than the cheapest alternative for price shoppers, less expensive than the best “expert” for those shoppers.
relationships determine prices. the goal is to build lasting relationships. if you’re in a period of accepting new clients offer them a deal by knock a few bucks off your fee. when they come back to you for the project your probably too busy and have to charge them full price, right. because everyone u gave a deal to is a returning customer. what about bartering? one good friend doesn’t like parting money on me, instead of me parting money on his retail hemp clothing store i trade. he wins on this front too, b/c everyone asks where i got the great clothes from.
Russell,
I have certainly seen many, many examples where a more expensive service has sold far easier, than a lower priced alternative.
I believe the term here is; “reassuringly expensive.”
I think you have summed up the best way of showing your customers why they will be happy by seeing that your existing customers have been happy as well. Even in a recession, happiness really doesn’t have a dollar amount on it.
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