Why You Should Not Devalue Your Price

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ELEVATING TO THE NEXT LEVEL

Many of us think if we lower our price to the barest minimum it will help us attract clients and give us the assignment or project over our competition. This is not always the right course of action to take. I have a potential client who has come back to price the assignment they want from my company at a very ridiculous rate. While I have given them a counter offer and I am waiting for their response. I must admit the pricing option they came back with perturbed me.

I have decided not to lower my price, despite the fact that the lower pricing may help me attract this customer. I have also concluded that I would be doing myself a dis-serve by not charging what my business and service is truly worth because I know and can attest to the value I am going to infuse into their business. This attestation is from other customers not mine.

Don’t get me wrong, I have lowered my price to get customers before, especially when I know that pricing can be an entry strategy and can enable me make more money down the line. At the start of my business, I conducted a service for a client and charged very little money. Today, that client is paying me many times more than the initial cost because of the value derived from the first project. I am on the third project with this client and having discussions on moving to a fourth.

The above example, I can relate with. But, some clients just want to pay you less even though they may be paying your competition more for similar work than what they want to pay you. I have come to realize that charging less than your competitors, signals to potential clients that you doubt the value of what you offer and you should have absolutely no doubt about what you have to offer. You need to value yourself and your business.

Being low cost has no advantages says Dan Kennedy, a marketing coach. He advises his clients, “that the best way to position themselves and their services, is to provide maximum value to both themselves and their clients; that premium pricing (or valuable pricing) can be advantageous if you ensure you constantly provide value and innovation all the time. Being the second lowest price has no advantage”.
Indicated below are his reasons:

Higher prices attract better quality clients
Clients or customers who only want to buy from you because you are the lowest cost provider will treat you as such. These “bottom of the barrel” clients will expect the world from you, blame all of their problems on you and leave you for a competitor in a heartbeat.

When you switch to premium prices and position yourself as the best at what you do, you’ll attract clients who value your unique offering. These types of clients tend to take responsibility for themselves and have reasonable expectations about what’s possible to achieve from your service or your work together. They are more likely to stay loyal, instead of leaving for the lowest cost option the moment it appears.
In short, they’re easier to work with, easier to satisfy, and they pay a lot more. They know that the old adage “you get what you pay for” is true, and they’re willing to invest in quality and doing things right instead of looking for the lowest price.

Your clients will value what you have to offer
When you beg to work with your clients and show that you’re willing to do anything to get the sale, including lowering your prices, you’re showing your clients that you’re a body for hire and that they are in control of the relationship. As a result, you’ll often be treated like an employee rather than a trusted expert. This happened to me recently and I have promised myself never to be in that position again. In every business dealing it has to be a client and business relationship, not someone thinking you are his/her employee. As a business owner, you should never put yourself in this position.

When you charge premium prices, offer specific and defined services, and you show an unwillingness to budge on what you’re worth, you will be treated as a respected authority in your market.
By creating some exclusivity and by being out of reach to the lower-end customers, you actually shift how your customers view you in their mind. You get to dictate the terms of the arrangement, and you get to decide exactly what value you provide instead of doing anything the client asks. This leaves you a lot more focused, and your client will treat you with respect.

Your clients will get better results
When you charge higher prices, your clients will be more invested in getting results. If you sell training or education, charging low prices will cause your clients to give up at the first sign of resistance, difficulty or struggle. When your clients pay a premium to work with you, they’re much more likely to stick with the process long enough to get results, even if that means trying and failing a few times before getting it right.

You can offer better support
You will build stronger relationships if you sell to less people than more people. Selling to more people will not make you to form real relationships or provide quality support to your customers. Selling to less people will help you address each client’s unique needs to make sure they get the result they paid for.
The second option gives you the freedom to spend the time making sure that every single one of your clients’ needs are addressed, their unique challenges are overcome, and they get the best possible outcome from your work together.

Going forward, I have decided to stop devaluing myself, my service and my business by being low cost. I will provide value and innovation to the satisfaction of my clients and charge the right fees for the right service. I hope you will also start to do the same.
– Marie-Therese Phido is Sales & Market Strategist and Business Coach Email: mphido@elevato.com.ng tweeter handle @osat2012 TeL: 08090158156 (text only)