It is not easy to make your clients pay more for your services. Companies would rather save money than pay more. However, when you have developed the right formula, you can ask for more and they will be obliged to pay it.
Many people market their services for a lesser amount than they are worth, but when they try to increase their prices they encounter stiff resistance from their clients, maybe even lose some of them. One way to do this without significant damage to your business is to mark your services as premium from the start. It will then be easy to mark your products down rather than mark them up, once a specific price point has been identified. Here are a few tips to help you bill your services better.
Become a Premium Service Provider
You have to identify features that are considered to be high-end in your line of business. Later, highlight them in your marketing activities. While there may be a strong urge to offer a basic level of service, you have to resist it. To maintain your premium price tag, you will have to stick to the premium service level.
Help your clients understand why you have priced your services higher by explaining it to them. If your competitors are offering similar services for a lower cost and you know that the low cost also translates into poor quality services, explain the difference to your clients. To put it simply, do not be apologetic about your price, explain the value to your clients, and if needed demonstrate how it can lead to a higher ROI.
Take Your Service a Notch Higher
Many businesses make the mistake of saying their services are better simply because their staff is friendlier. Friendly employees are not the only factor that a successful company needs. Successful companies have employees who are well aware of customer needs, so much so that they can anticipate them.
Do Not Sacrifice Price, Even During Tough Times
Just explain to your clients how they will benefit from investing in your services. You can be a little flexible with loyal customers. Note down all the clients you can be flexible with, and communicate the list to the sales team, so that they will not be forced to deliver snap decisions. You can give your employees some freedom when dealing with clients, but ensure that they are aware of which customers deserve special treatment.
Do Not Enter into a Price War
Weak competitors will quickly cut prices to get business. But you do not have to play the game. It is important to note that many businesses fail because their low price strategy becomes unsustainable. Another disadvantage is that your service will quickly become a commodity. There are many examples of businesses that have carved out distinct markets for themselves because they would not get into the trap of reducing their prices. But to do this you have to create and later sustain the service that justifies your premium price.
Project That You Are Financially Stable
Consider this example. Your air conditioning system is in need of an overhaul. You ask two local companies for bids. One is a newly established entrepreneur who quotes $4500 while the other is a 20 year old business that quotes $5000. Both offer 10 year extended warranties. When you call up the new entrepreneur to speak about his quote, he tells you that he will not be able to give your home an initial examination soon because his van is in the garage for repairs. You start to worry whether the new entrepreneur will be good for the 10 year extended warranty. Finally, you decide to go with the older established business. The newly set-up entrepreneur would have probably won your business, if he had only projected some more stability.
Companies will naturally focus on their competitor’s weaknesses to earn more business. However, to improve the value of your company, you need to focus less on what the competitor has done or not done and more on delivering premium value to your customers.
About the Author: Mark Khurshid, our Vice President of Training and Consulting, improves our products and works with users one-on-one to make sure they're learning how to get the most out of their software. His familiarity with all our products is rivaled by few, and when we can get a blog out of him, we leap at the opportunity.