Jim's Marketing Blog

Marketing tips & ideas to help you grow your business, by Jim Connolly

3 Ideas to help you, the next time they say you’re too expensive!

If you find that many of the prospective clients or customers you speak with are fee-sensitive, I’m going to share 3 ideas with you today, which can really help.

A quick look at ‘value’

I want to start by looking at the way your prospective clients think about value:

  • It’s always too expensive, when the price or fee is far greater than the value.
  • It’s always great value, when the price or fee is far lower than the value.

To get that price / value balance right, we have 2 options. We can either pump more value into the offering or we can lower the price. Most small business owners focus on lowering prices or fees, in order to make themselves appear better value. This is why we often see competing businesses in that dreaded ‘race to the bottom’, where business owners elect to out discount one another.

Here’s the thing about slashing your prices: Your prospective customers or clients can go to Google and find 20 lower priced alternatives to you, in minutes.

Here’s the thing about increasing your value: High value providers are rare. Rare value comes at a premium.

3 things to consider about fee sensitive prospective customers

If you are speaking with prospective clients or customers and you find they are often fee sensitive, here are 3 areas to look at:

  1. Have you pumped so much value into your product or service, that your price represents excellent value for your prospective customers? We can sell a great product or service for a great price, but we can’t expect people to pay a premium, for something that’s average.
  2. If you have pumped a ton of value into your product or service, have you clearly demonstrated it with your marketing messages? In other words, when people read your marketing or speak with you, can they easily see a clear reason why your services are of great value?
  3. Is your marketing attracting the right type of leads or enquiries? You can have an amazing service, offered at a wonderful price, but if the people responding to your marketing can’t afford it, you’re wasting your time. A diamond ring that’s worth a million dollars, would be amazing value if offered for sale at $100,000 – But if you’re trying to sell it to someone, who is broke and lacks the ability to raise the money, they can’t buy it. Make sure you’re reaching the right people with your message.

Getting the value balance right

Lowering a price is easy and requires little creativity, however, just because it’s the easiest way to make your offering look like better value, does not mean it should be your first option. Check you are attracting the right people with your marketing and ensure you are clearly highlighting your value in your marketing messages. Finally, always look for ways to pump more value into your offering.

The greater the value, the higher the demand.

The greater the value, the happier your clients / customers will be.

The greater the value, the more rewarding your business will be.

Photo: Neville Rodgers

JOIN ME!

Jim Connolly

I help small business owners make massively more sales and boost their profits. To see how I can help you and your business, read this.
JOIN ME!

28 Comments

  1. This couldn’t have been more timely for me as I’m about to head out to meet with a potential client, who are already know is price sensitive. This has given me some great tips to show and provide examples of how I add value in my services, during our conversation. Brilliant, thank you

  2. When it comes to selling a product or a service, the first thing one needs to do is find the target audience. Your target audience is a specific group of people that can’t simply live without your product. Of course, as Jim points out, it should be a compelling offer as well.

    Thanks for the tips, Jim.

  3. As always, intriguing reading Jim. I really struggle with this one, I am a reseller and have no control over the price, the value is certainly there, however people baulk at the price. Given that I am here to service people’s needs, I wrack my brains trying to help them arrive at the right decision. I still find that people don’t buy and actually want to have their problem. (Sorry that this comes across so negatively.

    • Hi Wade. If the product you resell has the value, make sure you’re showing it correctly AND to the right people.

      If the value is significant enough and you are talking to the right people, you will be fine.

  4. I like tips that you have given and I think increasing the perceived value of a product or service is more important than lowering the price. I also agree with you that we should attract the right kind of people who can afford our products. There are some people who say that everyone is our customer and I never really believed in this :-)

    • You’re right, Mike. The idea that “everyone with skin” is your customer is BS. It’s a by-product of the old days of pyramid selling.

  5. I’ve had my fair share of people telling me what I’m offering is too expensive, I counter that others may offer less value with hidden charges or hide something that will cost them more later. While this might appear to be de-marketing, it has worked in convincing many about the value of what I’m offering.

    But like Jim has just posited you can either communicate the value you’re offering clearly in your message or the one I like the most, offer more solutions and value since no one pays premium for average.

    Great Post Jim!

  6. It’s the easiest thing in the world to inadvertently devalue your brand. You have to look up to the likes of BMW who simply don’t offer a discount on anything they sell. As a result they build desire and an exclusive brand. (I’m not convinced of the quality though ;) )

    Great Post Jim, +1′d

    Steve

  7. This is especially true when you’re selling a skill or service. It’s so intangible that many clients find it difficult to see much value. After all, they probably think they could do just as well if they had the time.

    I’ve experienced clients who chose a less expensive writer, only to come back to me with the first draft and ask how much I would charge to fix it. In the end, they’ve paid far more than they would have in the first place.

    • Hi there Sara.

      Prospective clients often try and save money, by doing the wrong thing. All we can do is offer them a high quality service, demonstrate the value and allow them to make the decision.

      If we are talking to the right person, and we make the value obvious, we will attract great clients. Thanks for the feedback.

  8. Hi Jim, i totally agree with you competing in any service with neck to neck prices is not a good idea instead offering high value which no other person can provide will take us where we want to be. Generally any high priced product or service is linked in the minds of consumers that it will be a good quality product but to sustain that is quite a task but I too believe in going beyond the boundaries and helping people to build a brand and get the prices what you desire.

  9. Good post. I think it can be tempting, when things aren’t going too well, to increase your prices a little to earn more money but this isn’t always the best option. It should always go back to a question of value. Is the customer really getting value for money for your product?

  10. Perfect, I will add some value to my product…

    I did read this when I was thinking about lowerring my price… But I will not do so, let’s give this a try!

  11. great read… it can help us in providing a value for our products thank you for sharing it with us.. this has been of a great help

  12. It’s never about the price. I used to sell a course at $997. I couldn’t sell even 1 seat. Then I tested with $1997, I sold many seats. Eventually the price went up to $2497. Price is never an issue, when we can communicate the value.

  13. Wonderful post! Great timing! definitely something I needed to read today.

  14. Brilliant Post Jim,

    Just last week I had a client who couldn’t afford my services but I was still super keen to help her in some way because we had good rapport and I liked what she was trying to do…

    We just kept talking and in the end she purchased “four email replies” from me.

    Funny huh? Sometimes you can change service to fit a client who can’t afford you.

    Geoff

  15. Hi Jim,

    Great post and very encouraging. I find it funny that I’ve had emails from clients/prospects complaining about the price I’ve quoted them with the signature:

    “sent from my iPad” tacked to the bottom of their objections.

    I agree wholeheartedly, if you’re not coming from a point of value then the only differentiator left is price.

    Learning when to walk away is a valuable lesson as well – some people view everything from the bottom line and will tie you up in endless debate and discussions till you find that you’ve spent more in lost hours trying to convince them to buy from you than you make from the sale.

    Thanks,
    Alex

    • That’s an interesting example, Alex. It’s about the values we have. If we see more value spending £5 a day in Starbucks (over £100 a month / £1,200 a year), than we see investing the same in an essential business asset, we place a low ceiling on our potential.

      Thanks for the feedback, sir.

  16. I was just trying to figure out ways I could add more value to my online membership site so I could justify a higher membership fee when I saw a comment on Google+ about your article from Kimb Manson. That took me to this page, and what I read reinforced exactly the direction I was headed.

    I love what you said, “No one pays premium for average” Thanks for sharing your expertise… from across the pond in Dallas, TX

Comments are closed.