Slippery slope
Charging “competitive” prices. Approaching the segment you serve with “what the market (competitors) charge” gets you to be compared EXACTLY on what they do. And my guess is you deff have something different. A common (mis)belief is that once you get customers, you’ll “flood the market”, and from there raise your prices. Sure, you could do that. And raise little by little… 5%… 10%… 12%… In every raise, you’ll have to justify yourself on why you’re raising them: “Conditions have…
Killing innovation
Following vanity metrics kills innovation. If you’re following revenue as your key metric, you might be on a sketchy path. This might be obvious: higher margins would let you get a healthier business. High vs Low Margin One will let you serve your market at your best and focus on how to bring your customers even more value (value = what they do care about). The other, might be so thin that will focus you on how to keep most of it. And this —guaranteed— will default you to a state of…
Decisions
Taking more time to think over things and THEN make a decision is just stalling. Sometimes you have all the facts right on your face —yet you close your eyes and want to believe they’re not there. So you stall. Your friendly reminder that “No decision is a decision”. It might be painful. But it’s simple. 🙂
Look for someone
If you’re not having the best time with how your business is doing, look for help. Look for someone who, as painful it is for them, will tell you the things straight up. Someone who’ll call out the bullshit —and call you out to hear what you won’t necessarily like. Yet, something that will be in your best interest. Here’s how you’ll know: they’ll call it out not to sell you anything, but to get your shit together. And it’s painful. I mean, it’s your business. Your own baby. In the long run…
Revenue will *kill* your business
Wait, WHAT?! In the long term, revenue can (and will) kill your business. And this is not about the lack of revenue, but of your revenue stream. When left unchecked, you’ll get played by how much money you can be making. However, how much money goes into your business means nothing when your margins are thin. And here’s where pricing comes into play. Pricing is not about growth —or even revenue. It’s about how to maximize the margins to keep the business at its best. This is why pricing…
Simplicity
It’s not about what YOU think/see/feel is simple. It’s about what your customers think/see/feel is simple for them (or not). They don’t know the ins and outs. They don’t know better. They do know better, though, their day-to-day. They’re experts at that. A “simple” system for them might not be something that’s simple for you. Take “my old tax booking system is simple”… until they know how simple other things can be. Because simplicity —or complexity— has not everything to do with the use,…
How do you give your prices?
Do you have them all with all the details? Or do you have them as one single-price? Whatever form you do, what’s the thing you notice when negotiating/talking to your customers re: your pricing? Do you have any push back to justify anything —if at all? Hit reply and lemme know. 🙂
Revenue or profit.
Revenue or profit. Which one is the one you’re to aim for? Or better yet, if you need to make 500K in revenue, what would your approach be: Low price, high volume, or High price, low volume Same offering. Same inputs. What do you choose?
Basing your price
Food for thought on how pricing could be referred to. Time-based pricing: It’s focused on your time. Not on your customers’. Cost-based pricing: focused on your costs. Not on something for your customers. Value-based pricing: confusing as on what “value” is. Solution-based pricing: focused on the solution you offer (YOUR solution). Biases towards you being the option to choose. Outcome-based pricing: focused on the outcome your customers get. Transformation-based pricing: focused on what’s…
Be the dumb one
Some say that asking too many questions is either dumb, or makes it feel like an interrogation to your customer. I’d choose the former. 🙂 Think of it this way. You could approach it as if you know nothing of the solution. You stop yourself from solution-mode. And ask to understand what’s the big thing behind what your customer wants —and why they’re talking with you. Play dumb, as in “What if I didn’t know anything? How could I learn more of their challenges, and possibly help them?” That…