One of the most common marketing mistakes I see small businesses and consultants make, is that they set their fees or prices too low. They claim to offer a valuable, high quality service, but then lose credibility (and sales), by offering that service for a bargain basement fee.
In this blog post, I am gong to give you a superb three step guide to make sure you get your fees or prices right every time.
Marketing and mixed messages
When your marketing messages promise a high quality service, but your fees are suggesting a bargain-basement service, you send out a damaging mixed message. In marketing, these mixed messages are to be avoided at all costs, because they create uncertainty and they lose you business.
If someone is uncertain or confused about something – and you ask them to make a decision, they will always (well 99% of the time) simply say ‘no!’
A mixed message makes us feel uncertain, so in business, rather than risk making a mistake, the natural human response is to walk away from the deal.
It’s about value and NOT about being ‘cheap’
Your future clients are looking for value! They want to get as much ‘bang for their buck’ as possible and they already know that ‘cheap’ products and services offer very poor quality. When the economy is weak, people are even more focused on value than usual. Businesses and consumers will eliminate anything from their outgoings, which they think is not offering them great value.
Three steps for setting your prices or fees perfectly
- I always suggest to my clients that they start by researching their competitors; to see what the average price or fee for their industry is and to see what kind of guarantees or promises they are competing against. Here’s a great free guide to show you how.
- Next, after researching what your competitors are doing, you should aim to go one better. Look for ways to pump more value into your service, so that it’s MORE VALUABLE to potential clients than what your competitors are offering. Can you stay open later? Can you offer a unique guarantee? Give yourself enough time to really examine all the opportunities to increase your value.
- Finally, you need to set a price or fee that accurately reflects an attractive proposition for your new, highly valuable service. You achieve this by using the exact same technique used by all marketing professionals – Test, measure, test measure.
Test your new price / fee and measure the response you get. Then, adjust the fee until you hit ‘the sweet spot’ – the fee that allows you to make a GREAT profit AND gives your clients GREAT value! I have written a great free guide for you, which will show you what to do – it’s here.
Make sure your prices match your promises. It will not only make it far easier for potential clients to see the true value of your services – it will make your business far, far more profitable too.