The math in overservicing
Today, it’s about how overservicing can also hurt you. In Paul’s head, overservicing will delight his customer, Marie. It’ll get Marie to always work with him. Unfortunately, what’s actually happening is that Paul’s training Marie to expect way more than what they pay for —at Paul’s own expense. → The promise Paul makes: X → But Paul also works extra on things that are nice-to-haves to Marie, or are out of scope —without previously thinking and/or budgeting for them.The promise to Marie: XThe…
The math behind overdelivering
Here’s why overdelivering hurts your business. In a math edition. Paul is about to work on a project for Marie. In Paul’s head, underpromising and overdelivering will make a sweet deal in Marie’s eyes to: Close the sale Build a good reputation The opportunity to raise prices next time. [Because great work, right?] It’s the perfect formula… to unprofitability. → The promise in Paul’s head: X BUT → The promise in Paul’s mouth: Y → Paul tells Marie he’ll deliver Y, which is “10” less of what…
The best product wins
You’ve heard this before: if we have a great product, we don’t need marketing. Here’s the thing Product is part of marketing. And marketing is not comms and messaging —or ads.
Overdelivering 3/3
Makes your price go down —and your work’s value. Doing more of what you promise trains your clients to expect more of what you promise… every time. For. The. Same. Price. And since they’ll know you’ll do more for less, they’ll go for it. You’re giving a hidden discount, even when you don’t want to accept it. In the long term, it makes your work go for a lower price, and when trying to raise prices or go for the actual job, your customers’ expectations will be higher. You not keeping with…
Overdelivering 2/3
Overdelivering in the shape of attending an overserved market hurts you. You provide nice-to-haves. Moving one extra pixel that only you notice. Writing one more line of beautiful code, that only you care for. Here’s the thing If they’re nice-to-haves odds are, they’ll be mostly ornaments without a relevant job. It’ll increase your workload while adding either more complexity to your customer or adding nice features they don’t actually care about. You don’t need to prove anything. All you…
(One of) The big lie. A function of your costs.
Setting up your price as a function of your costs is one of the big lies we’ve been taught into. From hospitality…Calculate labour (staff) + supplies and then add what “the best practice” on profit margin in the industry is. Now you have your price. To B2B…Calculate what it costs you, add a margin and you’re good to go. You have a price. To consulting…Estimate how much you’d like to make in a year based on your costs, divide it by 2000 hours (aprox what you work in a year) and you have…
Maybe your pricing IS the problem
If you think of it as a response to the market. If you build it up as your costs + profits. If it’s set up being compared to the competitors. If it’s taken as what big cos do. If you want to build it from low entry points to then raise it. If you’ll raise it little by little. If you believe hours define it. If you believe effort defines it. If you believe it’s “what’s you’re worth”. If Rate is confused with Price. If you ask the question “what would you pay” instead of “would you pay ___”. If…
Maybe your pricing is not the problem
Maybe —if you’re not offering the same thing anyone else could do— your pricing is not the problem Your prospecting is. It’s either too broad. Too general. Or misplaced. More doesn’t mean better. Maybe this helps. Fill in the blanks: I help [THIS SPECIFIC GROUP OF PEOPLE] who [ARE FACING THIS SPECIFIC CHALLENGE/PROBLEM] get [THIS KIND OF RESULTS/IMPROVEMENTS] so that they can [GET THIS SPECIFIC KIND OF OUTCOME]. Would love to know what you do. 🙂
That dark place of doubting yourself
Writing a proposal and sending it with 3 options. Commenting on it with friends and getting back “But this is not how things usually work here. You need to give a (daily/hourly) rate.” It makes you think if you approached it right. If the price was too high. If you need to show more value. If you need to prove it. if you need to keep giving freebies (and free advice). If the prospect will walk away because you’re too expensive. If —maybe— you thought too high of yourself and shot too high….
Your price is not the problem
A common thread that comes when talking on pricing ANY offering comes as: “I believe my prices are too high. I think i’ll lower them.” When digging for the reasons, one recurrent is: “My potential clients have told me so.” If that’s the gist of the problem you’re facing, here’s a question for you: If you cut your prices to 50%, would it automatically double your clients, customers, guests? Would you have people lining up because you’ll be over capacitiy? Just think of that. 🙂