Sounds crazy, but it is important to remember that your price is part of your market brand and positioning. If you don’t do a price increase not only do you get way below the market, but also price is a “feature” that clients use to measure your worth, and they will measure you poorly with a price that is too low. Clients don’t know what kind of service they can expect, but price is an indication — cheap price, “low end service that should be happy to have any business at all”. If you have a lower than average price, people can assume your service may be lower than average. For example, would you hire a $40/hour attorney when everybody else is $200/hour? Even if the attorney had excellent references and a polished track record, you’d be suspicious about the low price.
We all know innately that there is a price ceiling for any service that most people won’t pay above. Well, there is the concept of the rock-bottom pricing as well and we’ve talked about what kind of customers that pricing model attracts in our last ezine. When you get too far below the market with your price, people only choose/keep you because of price, not anything else.
The trick is to set a strategy and stay solid with your pricing, which includes adjusting for cost of living and market adjustments. Whether you are skimming the top of the high-end market or positioning yourself slightly under the highest competitor you need to make sure your pricing stays in line with your company’s image and branding. Otherwise you too will look suspicious.
Here are some other tips to keeping your pricing and branding in line:
Market to the Emotions, Not to the Wallet.
Your clients care about price, sure, but more than that they have a slew of emotions that also influence decisions. Are you trustworthy? High-quality? Community oriented? Odds are you have some great features to market to your customers and they are related to pricing.
Make Sure your Image Matches Your Price.
It’s human nature to have pricing and image coincide. You expect casual service and décor when you walk into a Motel 6 and high-class service when you stay at a Four Seasons. Take a step back and make sure all your communications and marketing (website, brochures, customer service, leave-behinds, billing) are in line with your image and pricing combination.
Don’t Introduce with the Price.
Just like a candidate interviewing for a job doesn’t walk in and tell them how much he’ll work for, you don’t want to start off introducing your company with the costs first.