How much is it REALLY Worth? A guide for SERVICES pricing PART 1

10 05 2008

I have many clients that all the time undercut their value to give customers great pricing. Unfortunately it completely BACKFIRES on them and here is why. The job you do is directly tied to your price. Customer can’t see a service so they HAVE NOTHING to compare it against except itself. What I mean is this — if a customer has had the same service done in the past then they will judge your price and quality against that. However that being said if they have never needed a service like you offer in the past (and the majority of the time they haven’t) them they have nothing to compare it to. They can’t SEE the product before you complete the work they can only see the problem or challenge that they need to be solved. So they are really trying to your compare price against the RESULTS that you will produce for them.  The old FEAR about “you get what you pay for” is definitely true in the service sector your clients are scared that you are not going to be able to solve their problem to their satisfaction AND they will have to pay for your services. 

So when you undercut your price it direct correlates in their mind to the quality and your ability to deliver. Customers do not shop around for services the way they do for products because they do not understand what it will take to resolve their challenge (that’s why they are calling you). So NEVER EVER say to the customer you are the cheapest . What you perceive as helping them out actually does the opposite it provokes fear. This is why you may find customers don’t end up choosing you. So what do you do?

First of all spend more time with your customers understanding how much solving this problem is worth(more on this in future parts). Show them how you can solve their problem a little better then they expect(fear reducer). Guarantee your RESULTS (not enough service people do) it builds serious confidence in your potential customers in your ability because you are TAKING the risk(fear) away from them. Then OVER DELIVER and ask for referrals when they feel that you have.