Do you ever feel pressured to lower your prices so your services are “affordable”? Maybe a prospect has told you they can find comparable services elsewhere at a more competitive price. Or maybe a customer has told you outright you are too expensive.
As I wrote in a previous article, everyone loves a bargain. Sometimes, a customer will go to great lengths to negotiate a lower price. Combine this with our love of “winning” a new client, and the temptation to be affordable may be hard to pass up.
Being affordable comes at a price, though. Are you willing to pay the high cost of being affordable?
The high cost of being affordable
I read a story somewhere about a professional who assured his clients he was “reassuringly expensive.” While this initially seemed rather cheeky, I soon saw the brilliance in this comment.
Right or wrong, people value what they pay for, and the more they pay, the higher they value it. You have likely seen this in your own business. Maybe you have offered a free webinar, had a hundred people sign up, and then only had three actually show up for the webinar. Or maybe you have offered a free consultation call, provided tremendous value during the call, and then had the prospect say, “Thanks, but no thanks.”
In the retail world, you can easily see the high cost of being affordable by perusing the clearance section. This section of a store is perpetually in disarray. Often, the product has been damaged by shoppers tossing it around. When I worked in retail (a boutique yarn store,) the clearance yarn had the highest rate of shrinkage due to theft.
When you become affordable, your customers and clients are more likely to undervalue your service. Sometimes, you may even lose a client to someone charging a higher rate. Even if the other professional provides less value, your client is more likely to value their service more because of the money they are paying for it.
People equate price with quality. The professional who claimed to be reassuringly expensive was actually saying he provided a high quality of service. The price his clients pay him ensures that quality, in thought if not in reality.
Strive to be unaffordable
This is tricky. You don’t want to price yourself out of the market. However, you also don’t want to be so affordable everyone can hire you but no one will value you.
I have found a simple trick to becoming “reassuringly expensive,” and that is to quote my average monthly rate rather than my walkaway price when pressed to give a quote on the phone. The walkaway price ensured I would be asked for a proposal every time. Quoting the average price has decreased those requests to about 50%. This may seem like a loss, but in reality our close rate has become much higher than it was before.
Being able to say you are affordable may seem attractive. Being undervalued, overworked, and burned out is anything but. The next time a prospect asks if you are affordable, try telling them you are “reassuringly expensive” instead. I think you will be pleasantly surprised with the results.