15 Oct 2013

Someone has to be the most expensive, why not make it you?

A good friend of mine once said to me: ‘someone has to be the most expensive, so it may as well be you. But if you’re going to be the most expensive you have to be the best.’ At the time I was in a struggling business, barely 18 years old and staring down the barrel of going broke. My marketing strategy was to be the cheapest.

My friend’s wise words changed my life forever. I realised that if I based my business entirely on trying to sell by being the cheapest, things were only going to keep getting worse for me. He pointed out that if you are promoting yourself purely on price, you attract only price conscious clients, who generally have little loyalty, much higher expectations than their budget allows and a network of friends to refer who are exactly the same as them.

Thirty years down the line I see a lot of businesses that struggle to make ends meet and sadly, they never will simply because they don’t charge enough for their products or services. Many of the businesses that undercharge don’t realise that even if they were fully booked, or running at capacity, they would never make a profit.

So how do you charge more? Well the answer goes back to the first point raised in this Bullet – if you are going to be the most expensive you have to be best. Being the best covers a lot of ground. In my opinion there are 6 key steps:

1. The shift has to start internally – if you have a cheap mindset you need to replace that with a quality mindset. Nothing will happen if you don’t make this internal shift
2. Be absolutely aware of what your competitors are offering and work out how you can make your offer not just a little better but extraordinarily better
3. Leverage your past successes, years in operation, number of clients, types of clients, amount sold, awards – anything that adds to your credibility (maybe even write a book…).
4. Become great at selling yourself – and make sure that your staff are great at selling. Sell with confidence, sell with pride and don’t be afraid of pointing of why you are more expensive than your competitors
5. Be generous with your customers – exceed their expectations at every turn. Customers are generally won or lost based on the little things, so become really good at doing little.
6. Make it personal – do the follow up phone calls, give gifts, remember names, treat valued customers as the important people they are. This attitude has to be embedded in your company and it has to start with you.

Now a word of warning here, you can’t just start charging more and expect your existing customers to pay if nothing changes. You have to keep coming back to the term “be the best”. As you start to make changes you will notice that you do lose customers and this is where a lot of business owners freak out and go back to the cheap, cheap, cheap approach. But all that is happening is that your customer base is changing and getting much better. You tend to lose the customers you need to lose.

You will start to see new faces, people who are looking for quality, service, attention to detail and value for money in a good way. Get it right with these people and they will recommend your business to their like-minded friends. And before you know it, you will be working just as hard but making more money, building a truly loyal customer base and enjoying your business a whole lot more.

Good luck!

Andrew

CHECK OUT MY LATEST ARTICLES ON INC.COM –

The first one has been the most popular of my articles so far. Clearly I hit a bit of a nerve, writing about the relationship between how we act as people and the impact this has on the success of our business. It is a topic that I am very passionate about and one that seems to generate a lot of discussion.

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