I often speak to business owners who want to increase their fees but are stuck in the 'compete on price' dilemma. That dilemma is a fear that if you charge more than another company, people will choose that business over yours.
The problem is, when you compete on price, you're dependent on someone else not undercutting you - and they will. It's a nasty cycle.
The good news is that price is only one option for how you to choose to compete.
Instead, you can compete on value, experience, expertise, speed, guarantees, quality - you have options.
There are always people who can't or won't pay more. But there are also people who can and will. By focusing on those that won't, you miss those that will.
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.
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