If you’re a consultant, expert or provide another type of service, you may be wondering if you should reduce your price to acquire new customers. Here's why it’s a bad strategy and what you should be doing instead. 1. Price is Only Part of the Customer Equation Price isn’t a customer’s first thought. There’s a lot going on in their minds before they get to that question. Although it may seem like price is their first concern, these come before:
Imagining what your prospect is wondering about gives you the opportunity to make the case for your services before getting to the pricing question, “Can I afford it?” It will come up, but the question of price only becomes relevant when they’re considering making the purchase. People will pay if they believe you’re worth it, so use the right language to communicate that you are aware of their need, problem or pain. Then, make your pitch. 2. You’re Going After the Wrong Customers If your fee is a prospect’s only worry, you may be targeting the wrong market. If the discount is the only reason they hired you, you’ve cheapened yourself and you’ll end up with cheap customers who will always battle for low prices. 3. You Shouldn’t Earn Less than You’re Worth If you set your price at a certain amount, there should have been a reason for it. If you think you’re worth less, then you should be setting your price lower. Hopefully you’ve done your pricing research before this point — that is, looked into what competitors are charging or at least found out what’s typical for your industry. If you don’t think you’re worth that much, then you should be charging a lower price. If that’s not profitable, then you need to revisit your business model.
5. Price is Only One Aspect of Marketing Starting with the right product for the right market is where success begins. One way to do that is to avoid selling naked services at an hourly rate. Instead, create a suite of bundled services, a package with a high perceived value so customers feel they’re getting a good deal. Design it to meet a specific customer need with clearly defined benefits, and offer it at a flat and profitable price. 6. Price is Not a Differentiator When asked this question, “Why should I buy from you?,” your answer shouldn’t be “Because I’ve got the lowest price.” It should be, “I’m the only one that does X” or “I’m faster or better.” Carving out a differentiated space defends you against competition and may allow you to charge a higher price than the norm, rather than a discounted one. 7. Your Problem is Lack of Awareness, Not Price Setting a low or discounted price is only something you do once people know what you can do for them. It’s not the way to let people know you exist. You can generate awareness and leads through a combination of search engine optimization (SEO) and search marketing, advertising, public relations, content marketing and social media to drive traffic to your website. 8. You’ll Lose the Price War Trying to compete by offering discounts is a downward spiral, a game of how low can you go. You probably don’t have pockets deep enough to outbid your competition. 9. You Get What You Pay For It’s difficult to make apples to apples comparisons between service providers, so people use price as one indicator of quality. Setting your price too low or discounted could raise eyebrows. 10. Before Closing the Deal with a Discount, Consider This There are many ways to get closer to the deal, way before you need to sweeten it with a discount. Consider offering something that doesn’t cost you anything — like a free ebook. Or even a free first :30 phone call — something you may need to do anyway to vet out a prospect. This will give you another opportunity to convince them that you’re the best choice and worth the price. When a Discount May Make Sense With so many ways to market yourself, reducing your normal price should be the last on your list. However, there are times when you may want to use discounts:
Related article: Coupons for Business, Pros, Cons, and Tips
Make a Connection with Visitors Creating an FAQ is relatively easy and a concrete exercise which will help you understand customers. Thinking about what customers ask helps you understand what they care about. That should help you build a homepage that’s relevant and therefore resonates with them. In other words, by answering their questions you're demonstrating you understand their needs. When people feel you understand them, they're more likely to believe you can help them. Build Your List of FAQs by Asking the Right Questions Come up with a list of 10-15 questions you get asked most often. At this point, don’t worry about pricing, payment or post-sale questions, like "How do I install x?" Go broader, more high level.
Some tips to get you started:
Write the Answers
Transform Your FAQs into Homepage Content
Using an FAQ to create a home page that resonates with visitors involves thinking like your customers and knowing who you are as a business. It will help you build a solid foundation for your website's content, but it isn't everything. You'll also want to consider writing in your branded style. Adding key components like a call to action and trust factors will help you round out a smart and effective site.
Google's Featured Snippets in Search You may have noticed lately when you ask a question in Google, you see something like the results below. I had asked, "How do I fix a flat bike tire?" Google calls this a "featured snippet block." When Google realizes someone is asking a question, they detect pages with answers and display a bit of it on the results page. You can't mark your page to get Google to notice it, but it's another good reason to answer questions on your website. FAQ's may also be used to build out a whole content strategy. Once you've written the brief answers, you can write whole articles that go into greater detail on the subjects. You can post them to your blog, and use the brief answers as links to this deeper content. Or, you can use publish them at other websites to drive traffic back to yours.
Let us know about techniques you're using to create an effective homepage and website, and be sure to share your link to the site.
Several years ago, I sat down to lunch with a sales manager of a Seattle area meeting facility known for its long history. While we sipped sangria and tucked into our paella, she told me she was having a tough time figuring out the competition. If she could get an idea of who they were, she could focus on what made her offering better. With so many places to hold events in the city, she was getting lost in the sauce.
Think Like Your Customer She had tried to make the comparison by number of rooms, capacity, menu, catering, etc. I suggested she was looking at the problem from an insider’s point of view rather than the customer’s. According to Al Ries and Jack Trout in their seminal book on the subject, Positioning: The Battle for Your Mind, “…you position the product in the mind of the prospect.” In other words, she needed to think like an event planner, although not all event planners are the same. Define the Competition By What You Offer I asked her to step back and think about who her customer was based on what she had to offer. Her facility is one of the few historic places that hosts events. Our first idea then was to go after planners interested in historic properties, but there probably weren't enough of those to make a market. So we broadened our perspective. That is, target event planners looking for something a little different from the typical hotel. This customer would be interested in an unusual location. Their thought process might be, “What space will make my event more exciting for my guests?” Once again, it’s important to put yourself in the mind of your prospect. That made a place like the Olympic Sculpture Park Pavilion a competitor. For more ideas, I suggested using Google to do a search as if she were the customer. For example, a search for historical meeting spaces Seattle revealed: Warwick Hotels, Washington Hall, Georgetown Stables. This provided a short list, rather than hundreds of generic hotels, for comparing her property's strengths and weaknesses.
It was a great lunch, but even better, my lunch companion now had a marketing strategy that would save her time and get her more business.
|
Robbin BlockSharing what I know and love about marketing small to medium businesses. About me Categories
All
|