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Blog posts tagged customer value
Why you are not paid what you are worth
May 23, 2011
If you are not getting paid what YOU think you are worth then I suspect that there are a number of possible reasons.
The top two most obvious reasons are:
- Customers don’t think you are worth it
- You are not asking for the right fee/price
If the answer is “customers don’t think you are worth it” then this is because of one of the following reasons:
a) They don’t know you’re worth it (the obvious answer)
b) You’ve not proved that you are worth it
In either case, the answer is because of your lousy marketing.
More often than not (especially for professional service firms), the issue is not one of competitive price. Normally the customer is not comparing your service with another competitor on price. Often he is not comparing your service with another competitor at all.
A third possibility to answer why “customers don’t think you are worth it” would be:
c) You are not worth as much as you believe you should be.
And if the answer is the second response to my original question — “you are not asking for the right fee” — then you need to sort out the basic problem which was that “customers don’t think you are worth it”, and then ask for the right fee.
Robert Craven is an expert contributor to Marketing Donut. He runs The Directors' Centre and is the author of business best-sellers Kick-Start Your Business and Bright Marketing.
The DFS effect - what happens when you're always on sale
December 14, 2010
I see it all the time. I even take advantage of it. Some businesses have too many discount sales and special offers — in fact it can seem like a permanent sale. I call this the DFS effect.
But what happens? No-one buys at full price.
Now it is, of course, very tempting to drop your prices when you have stock to move, and I am not suggesting that you don’t ever have sales, just don’t have them all the time.
If every email you’re sending out to your list is just what’s on sale, or that you’ve knocked so-and-so-many per cent off “this weekend only”, and if you send them often enough, it’s not going to take long to wipe out all your full price sales.
There is a certain children’s mail order company that I often use to buy things for my small people and I know that I only have to hang on for another week or so every time I want to buy something and sure enough a discount voucher will plop onto the doormat through the post. I am regular customer and so I know I don’t have to wait long. Now what’s silly about this is that yes I do buy when I get my discount voucher, but the business has lost my momentum, and also the cash I was ready to part with “on the spot”.
Now for a big mail order catalogue, or a large chain of furniture stores (ahem!) the continuous offers and discounting is part of a major marketing plan, but if you’re a small business you don’t always have the luxury of bigger margins and a constant flow of orders. If you’re a smaller business you value every sale, and all of those that are not at full price just mean you have to work harder or sell more (or both!). You also then set a precedent that your prices are not “real” but “inflated” (yes I know those DFS sofas were on sale somewhere for a week at £1500 but no-one was buying them, right?).
So stick by your guns and don’t be on sale all the time. Think about value-added offers instead, or extras you can include. Once you lower your prices (which is effectively what you do when you’re always on sale) it’s really hard to push them back up again to the same customers. Then you’re left with either finding new customers, or accepting that you’ll only ever be able to sell for less.
And don’t even think about offering five years interest free credit if you’re a small business either! Money up front thank you very much.
Lucy Whittington is an expert contributor to Marketing Donut and is director of Inspired Business Marketing.
You were the most expensive... but we'll go with you anyway
November 08, 2010
How often do your clients say that to you? In a competitive marketplace, it’s so tempting to feel like you need to compete on price. After all, if you’re the cheapest, clients will flock to you won’t they?
Take a look at your marketing literature: your website, your latest leaflets or flyers. What’s the main message? I met with a prospective client recently and the message that was coming across loud and clear was “we’re cheap”. This lady runs a successful business, her team work hard and they’re making a profit. But I can’t help thinking that they could be making an easier profit, attracting easier clients and making a larger profit if they just thought about repositioning themselves.
Most businesses have a Unique Selling Point (USP) that extends beyond how much they charge. The trouble is, they rarely communicate that USP effectively. The downside to this? You’ll end up attracting customers who only want to work with you because you’re cheap. They won’t value what you do, they probably won’t want to spend what you want to charge, and they’ll just recommend more people like them. It’s a vicious circle.
Moving your marketing away from being “the cheapest” takes a bit of bravery. Putting your prices up takes even more courage. But trust me, if you can do it effectively you’ll start attracting the sort of clients who really value what you do, and they are the people who will be with you for the long term.
If you run a service-based business you’ll also buy yourself enough time to do the quality of work you really want to be doing. And if you can communicate the benefits of the value you’re offering effectively, you’ll finally hear those magic words: “you were the most expensive, but we want to work with you anyway.”
Fiona Humberstone is an expert contributor to Marketing Donut and managing director of Flourish.
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