Episode 465 – Crushing Lowball Competition
What do you do when there is someone in your area doing the work practically for free, making it difficult for you to get clients. How do you compete with people who are charging less than your costs? Today we’re going to talk about crushing that lowball competition. If you can’t figure this out, you will either never grow – or never grow profitably enough – and be able to hire good talent and have a business instead of a job!
False Belief: You have to take what your prospects say they will pay
Not true! Not only do you get to pick the price you charge, you can pick the prospects you accept. In addition, you even pick the prospects you ATTRACT! The way that you market yourself, the way you present yourself – those things you can control and directly affect the type of prospects you attract. Start by attracting the right prospects, and from those choose who you accept, paying the price you choose to charge.
False Belief: If you are more expensive, you are “screwing” people
More often than not, cheap people are the ones screwing people. Customers that are cheap expose companies to liability or not being able to deliver on their promised service! It’s important not to get caught up in feeling like somehow it’s wrong to be ‘expensive’. Your rates reflect the service you provide. A cheap service may not have insurance, may not be paying their employees well, and may be taking shortcuts that they shouldn’t be taking. Decide what kind of service you want to provide and then set up your rates reflect that.
False Belief: Everyone wants the cheapest
You may feel that way, but maybe you are attracting people that want the cheapest. The truth is everyone wants their problem solved and to FEEL the way they want to feel. Once they get that, then they look for the cheapest rate. You will find that everyone really doesn’t want the cheapest first. Look internally, and see if that’s a mindset you’ve adopted. It’s like that $1,500 paper clip from Tiffany’s. The people who buy that like the way it feels to own it., and to tell people they have one.
False Belief: The way you deliver your service doesn’t have anything to do with price
When you find out what your BEST customers want and what your BEST customers need, then pricing does not become an issue. Take Disneyland for example. It’s called ‘The Happiest Place on Earth.’ People who go to Disneyland go there because of how it makes them feel. McDonald’s sells ‘Happy Meals’ to kids, because it makes kids feel happy. Deliver what your customers want and you can charge premium prices.
False Belief: Everyone knows about the cheapest
That’s not necessarily true! Cheap people don’t know how to market and they don’t have the budget to market. If you don’t have a way to communicate your message, that’s a bad position to be in. Word of mouth is great, but it’s not scalable. If you want to grow, you need to market your service so that the best customers know that you can make them feel the way they want to feel. You don’t want to try and convince people who are cheap not to be cheap, you want to attract the people that want the result.
False Belief: The way you market doesn’t have anything to do with price
This belief couldn’t be further from the truth. The reality is Tiffany’s $1,500 paperclip is just a paperclip made out of gold. Other than that, it’s no different than any other paperclip. Tiffany’s knows how to attract clients, they know how to market. People walk in the store wanting to feel a certain way, and they leave feeling the way they want to feel. Another example is handbags. You can buy a handbag for $1,000 or for $10. Both will serve the same function, but the $1,000 handbag makes you feel a certain way. It has EVERYTHING to do with marketing. YOU choose how your customers perceive you. Do you want to be treated like a $10 handbag, or a $1,000 handbag?
Once you understand how to only attract the right customers, they will expect to pay a premium price because they want a premium result. You will then have all the money you need! Not only will you have your profit, you will also be able to pay people well, have a strong client attraction system and blow your customers away with your service and the result you make for them!