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I had a great meeting yesterday with a prospective client. The owner was one of those people who you instantly like. I had the privilege of watching him interact with a customer, and was not surprised when he gave his price and the customer raised her eyebrows in shock.

Alas, his price was low, very low, and he was easily giving her a present she didn't want, or need.

Have you seen this look? I personally have never seen this look from a prospective client. They know they are spending good money and getting great value in return. And that is the point.

People don't want to save money, they want the maximum amount of value for every dollar they spend.

Are your prices too low? Firstly, check out all of your proximal competition and evaluate the cost/benefit differential between you and them. Are you asking less for more than they offer? If so, stop! Don't EVER use "lower prices" as a differentiator. Somebody will always race you to go out of business.

Rather, focus on the value of your product/service. I find all too often lower prices are a function of a few things, including:

  • The fear of losing a customer
  • Low self-esteem
  • A failure to evaluate price logically
  • A need to stand out from the competition

 

Value is what people spend money on.

 

Value is why some people spend x money today on a reliable car, while some people save money on a car only to spend x money in towing and repairs. When I was in college, I dated a beautiful girl whose father made great money, yet spent as little as possible on the family car. As a result, the car was always in the shop, which led to loss in his wages. And the costs to repair the lemon exceeded the amount it would have cost to buy a reliable vehicle to begin with.

This man was not your ideal customer, however, let me tell you who is.

Look, your ideal customer doesn't want cheap cleaner in their pool that is going to blind their kids, a crappy chair that is going to creek, a frame that is going to fall apart or music lessons that are going to teach you less than a $15 DVD.

Your customer, your ideal customer wants value. They want the best services, the smartest expert, the most reliable product and the cheapest milk (commodities are an exception to the price rule). The point is, focus on the tangibility of your services and the benefits of your product.

Focus on the value and let your price reflect that reality.

Don't compete — DOMINATE.

 

Matt Steffen

"Don't compete -- DOMINATE!"

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Matt Steffen was Listed by Forbes as the #1 Marketing Consultant Who Avoids the B.S.

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