This week, I had a coaching session with a client, who is using Kjiji to advertise and promote his mobile auto repair business…
Now, I am not knocking Kjiji, but…the customers that were inquiring about his services were all about price, They were bargain hunters, bottom line.
Here is how to sift through bargain hunters and it is pretty simple and not time consuming, just ask what their budget is?
What would they like to spend?
Once you get an answer you can decide to take the deal or perhaps, you need to educate them on your value and why your price may be a bit higher.
In this clients case, he comes to your location and can fix you car. That to me is worth the convenience alone. He does good work plus he has to do some pretty hard lifting…getting dirty, or underneath the car, making accurate assessments, ensuring the job and your safety is taken care of…all of these factors or benefits go into his price.
Your job as a business owner is to know what it is that you bring to the table or to know what the key benefits are.
When you can share them with the client in a way that educates and informs, I can almost guarantee, that your client will have an “Aha” moment and see the value in what you do and may pay the price you are asking and deserve.
Simply, ask what the client’s budget is, then assess, and share the benefits of what it is you do.
One other key to negotiating is to truly know your business. know your competitors, know what they charge, (Competitors), assess the pain your clients are in as well.
If you understand what your competitors charge, you can share that information and then go back to the benefits of what it is you do and ask the client if your offering and price seems fair.
If you can assess the costs of the pain or challenge your client is facing, you can ask that is your price relative to their needs, pain and challenge, that they must solve or fix is worth the price you are charging.
When costing or pricing issues come up with your clients, always remember your value…
Value is the sum of your benefits.
In business terms, there are 4 key benefits to focus on.
1. Service benefits. What are the benefits of your service?
2. Product benefits. What do your products do for those that buy it? What matters to your customers in terms of both your product or service?
3. Brand Benefits…is there a benefit in the brand? If you are looking for an example, think of Heinz ketchup, the benefit is the taste, the consistency…you would be hard pressed to go to the grocery store and buy, No name, Hunts, and E.D. Smith, brands…however, French’s ketchup is grabbing market share away from Heinz, especially in Canada, since they make it in Canada.
4. Relationship benefits…what is the thought in your customers mind when it comes to you? A good example of a relationship benefit is the TD Bank. Remember those 2 older guys in their commercials a few years ago? Wow…did they drive home the relationship benefit or what?
You knew, the TD bank was open late, then on Saturdays and then on Sundays too!!! What is the bank doing opening on a Sunday? In my day, it was closed!
As a customer if you needed the bank to go to on hours you need, well you had a trust that the TD bank would be open when you needed it to be!
If you are scratching your head about understanding the benefits of your offering, look at these 3 areas for inspiration.
- Past success stories with your clients. What results have you helped your clients achieve? Ask them, they will tell you why they bought from you and how you helped them.
- Industry data. Let’s say you are in a certain industry. Your trade association will have data and reports on the impact your industry has in the marketplace, Be a student of your industry and share that information with your clients, For example a home organizer or office organizer can save the average small business owner 9 days a year from not wasting their time looking for lost files and paperwork. Each industry trade association should have this kind of information for you to use in your marketing and sales messaging!
- Knowing what is you do to help a client and get clear on the outcomes your clients get after they have used your goods or services…also, know your own personal story and how it relates to what it is you do. Why did you get into this business? Why should your clients buy from you? What makes you better, cheaper, faster or more unique? Get to understand yourself.
So, the next time you get into a discussion on price. Get educating the client as to what it is you bring to the table, How you help, How it works? That is a major learning point as I close this post. When you can clearly state, “This is how it works” and share what it is you do in terms of the process that you go through when you work with a client, all of a sudden your value and worth go way up.
In your mind, the “This is how it works” isn’t even worth talking about, because we take for granted what we do for the customer, because it is so easy for us. It comes naturally.
But, when you break it down for the customer, and share openly as to how it works and why it works, your customer will have a different understanding of you, what it is you do and how you get them from point a…to point b.
Next time, don’t haggle over price, but be clear as to what you bring to the client and how it works and they will now know that the price your asking is so well worth it!
David is an author, business coach and facilitator and was the former host/producer and creator of the Small Business Big Ideas Show heard weekly for over 9 years. David has taught thousands over the years in both the non-profit and for profit sectors and has coached hundreds of start-ups to make those important first steps. He specializes in teaching the 8 Keys to Success, How I got to Kiss the Stanley Cup and his new keynote called “A breakthrough-through the glass”- how to overcome the fear, plus he leads workshops in sales, marketing, market research, business plans, target marketing and customer service programs.