Setting (and obtaining) the right price is important for any business so, what can you do to raise your fees?
Did Prince William really pay £180 for his new buzzcut as widely reported last week? It’s a haircut I know well and, like myself, it looks like HRH has come to the conclusion that ‘less is more’. But ‘more’ also appears to apply to the price - considerably more than the going rate.
If true, it's a price tag that’s left the nation’s barbers scratching their heads and wondering how they could charge more themselves. And wouldn't we all like to charge more for what we do?
Setting (and obtaining) the right price is important for any business so, whether you are buzzing up a royal No1 or offering a more complex product or service, what can you do to raise your fees?
Focus on your value, not price
What kind of conversations do you have with prospective customers? Is it about the value you can bring, the quality of your product - or is it mainly about price?
If your prospective clients are focusing on price when comparing you to other options, you are looking like a commodity and that’s bad news, especially if that service is charging less than you are. Conversations along the lines of “but so and so only charge x for the same service” means you’ll have an uphill task in charging what you know you are worth.
So move the conversation towards the value and experience you bring, the results you’ve achieved for others. Introduce customer testimonials and case studies, be proven in your field - it’ll help to demonstrate value and enable you to charge more.
Focus on a niche
One way of doing this is to focus on a specific sector. You build a reputation and, through the reassurance of your experience in that sector, customers feel it’s worth paying more for. An architect specialising in period renovations will justifiably be able to charge more for a job related to their experience than a generalist.
I know businesses who specialise in niches in filmmaking, web design, marketing, health - their specialism and visibility in niche markets inspires confidence and is why customers will be only too pleased to pay a higher rate.
Build tiered steps to purchase
Start by charging less. Less? And you thought this article was about charging more… so bear with me on this one. Say you have a new service that you’d like to price at £5000 - for some that could be a very considered purchase that customers might see as a risk. So you introduce something that reduces the risk - and at a lower cost. How about a taster of that new service for £500?
Bryony Thomas, in her book, Watertight Marketing calls this a Gateway Product. It’s something that gives customers a sense of what it’s like to work with you - before they part with a much larger sum of money. It acts as a stepping stone between thinking about buying from you - and actually buying from you. See what she means in the article 'Creating gateways to paying customers - 5 real examples'.
Change the perceived value or format
People will often be prepared to pay more for something depending on what they perceive the value to be.
That book we found on Amazon for £14.99 might tell us everything we need to know about its topic - so why do we pay £147 or £297 to spend three hours hearing about it at a seminar or course? Because, for some, there’s more perceived value in a seminar than a book - and there's a higher established price point for that format.
The same might be said for Apple - are their products really worth more than other options - or does the whole ‘Apple customer experience’ mean we perceive that they are?
So are you sitting on valuable knowledge you could re-package in a format (or experience) that the customer perceives is worth more?
The Stella Artois proposition
“Reassuringly expensive” - remember those ads from a few years back? Stella Artois angle was that by being more expensive, their premium lager was therefore better than cheaper brands. There is some logic in this - if your product is less expensive than others that are similar, it may wrongly be perceived (that word again), to be of a lower quality.
So if you are getting rejections for your service - it might not be because the price is too high - it could be that it’s too low. By increasing your rates, you could join those who are benefitting from being "Reassuringly expensive".
If you hear ‘yes’ too much
Possibly even worse than getting rejected because your price is too low - is winning the business when you could have charged more. Your customers sense a bargain, award you the business and before too long you are at capacity - but not earning enough.
So, the next time you are invited to bid - you have nothing to lose in raising your fees. If you do lose, you are busy anyway - if you win then your feeling that you could charge more is validated.
What your customer is willing to pay is a complex mix of how they perceive your offer - something you’ll need to appreciate if you want to charge more. If they can see your value and a point of difference and, in the case of a Gateway Product, you can help them up the purchase ladder, you’ll be that much more likely to achieve your true value.
You might even be able to stretch to a £180 haircut.
Ben Wheeler is a freelance marketing consultant and content writer working with growing businesses - and an Accredited Consultant with Watertight Marketing. He also helps clients produce articles for LinkedIn.Back