When you choose to compete against businesses that keep slashing prices, you leave yourself very vulnerable. What if they can afford to go lower than you? What if you have a higher hourly rate, but do better work in less time, making you cheaper overall?

Remember that you don't need every person in a market to be successful. Ferrari sells fewer cars than Nissan, but the directors aren't pulling their hair out over that fact. They operate on price and desirability, not volume.

My suggestion to escape this pricing dilemma and adopt a different mindset for your business is to look at the premium brands.

Take a Mercedes for a test drive.

Visit a Louis Vuitton store.

Check out some Rolexes.

Go to Tiffany's.

Go to an expensive restaurant.

Apart from the meal, this is free market research. Browse and observe.

Do they ask for your first name? Offer you champagne? Provide a personal shopper? Do they pressure you into buying or give you space?

In my experience, the luxury brands are masters at customer service. There's no sales pressure, they know the products inside out so they can answer all your questions, they often offer you drinks, and nothing is too much trouble.

They understand the experience of shopping with them!

So how can you do the same? The list above demonstrates there's not a one-size-fits-all answer to this, so have fun getting creative.

Maybe a handwritten note to all new clients? Or a small birthday gift? Whatever it is, the point is to treat them as people, not "just clients", and to make working with you an enjoyable experience that they aren't getting with the person charging less than you.

You can't expect to be a good provider unless you're already a good consumer. When you appreciate why people would choose to spend more with a particular company, you understand what you need to do in order to break out of the compete-on-price mindset.

And if you want to implement this in your business but not sure how, click the 'book now' button below to schedule a free call.

For example, if you’re a VA and want to work with high-level people, why position yourself as a “VA” when the term has become incredibly broad, vague, and non-specific? If you’ve got a defined audience, it’s incredibly important to speak their language. High-level people, particularly in the corporate world, might prefer a “remote executive.” Or an “invisible assistant.”

In accounting, what do you specialise in? Will you help 7-figure business owners lower their tax bill, or start-ups understand their P&L?

If you do email marketing, then “I increase the lifetime value of your customers, boosting revenue and saving costs, because it costs 5x more to get a new customer than retain an existing one” is infinitely more compelling.

This is how you can price your services without worrying about your competitors.

I want to share a real-world example with you. When it comes to this positioning and messaging, the best in the world are the premium brands. You don’t have to like these brand, use these brands, or copy these brands - but it pays to understand what’s going on.

Because this psychological process is happening to us, whether we realise it or not. You, I, and everyone around us are influenced by the subtleties, even if don’t consciously register them. Premium brands, for example, are masters of space. White space on web pages, minimalist designs, and open spaces in their physical shops.

They are also the masters when it comes to attention to detail - never use five words when 2 or 3 will suffice. And believe me, they put unbelievable due consideration into this.

Example: When Steve Jobs was ousted from Apple and formed a new company, he hired someone to design the logo. This guy refused to give Jobs options to review, and he refused to have client input. He said “I will solve your problem.” He charged $100,000 and he delivered the logo with a 100-page booklet explaining every detail within that logo. (Remember that, next time you say you’ll design a logo for £20.)

I use Apple quite a lot in these examples because in the mainstream items, they are the masters at it. (By mainstream, I mean they’re a brand people buy without being extremely rich, unlike Bentleys, yachts and £30,000 handbags.)

So with your messaging, the psychology is simple: people buy vision and emotion. We don’t buy features. We buy the version of ourselves using the item.

Take the Huawei MatePad Pro, and Apple’s new iPad Air:

At first glance, they look absolutely identical. But while Huawei focuses on the features (which few people will even understand), Apple explains what you’ll do with it.

Let's look at Huawei first:

“With the 90% screen-to-body ratio and bezels stripped back to 4.9 mm, the 10.8 inch HUAWEI FullView Display offers remarkable visual experiences, whether you are seeking inspirations or just catching up on some work. Every dark or bright detail looks vivid and clear with its DCI-P3 cinematic level colour gamut and 540nit brightness. Certified by TÜV Rheinland, this screen significantly reduces blue light to protect your eye health.”

There is no clear audience in this. “Whether you’re doing this or that” is a no-no for a defined audience. 90% screen-to-body ratio, DCI-P3 and 540nit brightness - would you buy that?

Now let's look at how Apple presents the iPad Air:

Let’s pretend you charge £50 an hour to repair computers. 

And Tony down the road charges £40 an hour to repair computers.

No question, some people will challenge your price and say “Why would I give you £50 when Tony charges £40?”

This is a penny-wise, pound-foolish outlook. What if you’re actually much more competent than Tony, and will do the job in one hour, whereas he will take two or three hours? Your “more expensive” hourly rate works out to be £30-£50 cheaper!

In business we often think that our competitors are anyone offering a similar product or service - web designers feeling like they're competing with other web designers, for instance.

But that’s wrong.

Lamborghini and Toyota both make cars.

Rolex and Casio both make watches.

McDonald’s and Gordon Ramsey both make food.

Ryan Air and Emirates both fly you to a different country. (You can pay multiples of a price on the same plane.)

No one would argue that those businesses are in competition with each other. Lamborghini is actually in competition with Ferrari; Rolex with Omega and Patek; McDonald’s with Burger King, and Ryan Air with EasyJet.

There is always space for different pricing levels within an industry. People who buy their food at Harrod's are well aware they can get it cheaper in Aldi. All you need to do is decide what value you provide in exchange for the price.

The same is true across the board. Mechanics working on those Lamborghinis will not be charging the same as the mechanics in your local garage. 

So I urge you to work out who your competitors really are.

And you do that by deciding what you really offer.

Most of the time we take the face value of what we do, and let it define us.

“I do SEO.”

“I’m a marketing consultant.”

“I’m a fitness coach."

“I’m a mechanic.”

Sure, they’re all true. But they don’t convey any value.

Compare the above with the below statement. They're the same work, but the framing is entirely different and they separate you instantly from everyone else:

“I increase organic traffic to websites so businesses can increase revenue without relying on adverts.”

“I help businesses to stand out from their competitors and earn more money.”

“I keep customers’ prized cars safe and reliable so they can drive without worry or discomfort.”

“I help busy dads get in shape even if they have demanding jobs.”

The key is to find the value, which you do by identifying what it means to the customer.

If you’re an artist, the value is the buyer feeling happy each time they walk into a room and see that magnificent piece of art on the wall. Priceless!

If you make guitar straps, the value isn’t the material. It’s the fact it keeps them comfortable during a 2 or 3 hour show, and will protect their £1,000 guitar by preventing it from falling off a cheaper strap. Pitch it that way and you can exponentially increase your prices.

If you're a therapist, the value is that you literally change people's lives.

Once you know what you’re offering, you'll be able to explain your prices if anyone ever asks why you’re not matching Tony down the road. (Anyway, what if Tony lowers his hourly rate from £40 to £30? Do you keep lowering, too? What if he lives alone in a small apartment, and you have a family to provide for? What if you’ve got years of experience and testimonials and he doesn’t?)

A short - but valuable - exercise

A lot of this is about mindset. And if you’re reading this, I’d wager you have a strong mind - you have to be, to be in business for yourself.

So set aside 30 minutes and think about this question: How do I want to earn my money?

I did this and my answer was “to genuinely help people to improve their lives.”

In my capacity as a marketing consultant, that ultimately means helping business owners to have less stress, earn what they want or need, and enjoy what they do. It means helping to offer a new perspective, to clear roadblocks. 

What is the answer for you? When you go to bed at night, what would have been a productive and fulfilling day for you?

The answer to that will unlock how you provide value to your clients, which will help you decide what you should really be charging.

Regardless of what Tony is up to.