Pricing in Tough Economic Times

By Robert Middleton - Action Plan Marketing

Today I met with one of my Marketing Mastery Program participants, Dave D., for his monthly coaching session. Dave is having a banner year with the fourth quarter numbers looking very, very good.

Dave shared how he had just implemented an idea he had learned in the program.

Dave just pitched a $25,000 project to a client, but he got a little pushback. With the recession, and budgets being tight, they wanted to know if they could get a better deal.

These days, many of us would find a way to knock off a few thousand, go the extra mile and hope this would translate into more work down the line.

But this would be a mistake.

This is something I learned from Alan Weiss years ago. If you are asked to reduce your price, you need to make a corresponding reduction in the value you provide.

And that's exactly what Dave did.

He went down the list of the twenty or so things included in the proposal and suggested they cut back on a few of them. These were things they could for themselves quite easily.

So this cut back Dave's workload with his client and he was able to cut $5,000 off the project. The client readily agreed and signed a $20,000 contract without delay.

Another variation of this, which fits well during tough economic times, is to offer three options for every proposal you submit: Deluxe, Standard and Basic.

Again, Alan Weiss emphasizes that it's better to have a choice of yeses instead of a choice between yes and no. This way your clients are still able to take advantage of your services while maintaining some control over their budgets.

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The More Clients Bottom Line: In recessionary times it's more important than ever to offer you clients some choice. But if they can't afford the full fee for your services, you must cut back the scope of the projects. If you don't do this, it's an automatic invitation to keep pushing the price down while your workload remains the same.

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How are you pricing your services these days? Please share on the More Clients Blog by clicking on the Comments link below:

Action Plan Marketing Survey (And Club Membership Drive)

I got lots of very useful information from the survey I posted last week. I'll be reporting on this in more depth later, but let me give you a few highlights.

Most Important Area of Marketing - The area that got higher scores than any other were challenges with marketing messages and branding, Each got about 44% of you saying these were important to you.

Biggest Marketing Challenges - The areas that got the highest scores were things like time management, procrastination, lack of focus and perfectionism. Dislike of marketing had a very low score, proving that just getting it done was the bigger issue.

Programs and Services - The kind of programs people said they wanted most were hands-on, how-to type information programs such as teleclasses with transcripts, e-books and other tutorials, including actual marketing samples.

The Marketing Club Addresses all of these.

I'm going to do a second round of this survey soon to zero in more on some of these areas. However, the survey was a validation of what I'm currently offering in the Action Plan Marketing Club.

1. The Club has a big focus on marketing messages and branding, with several expert interviews and other material to help with this important area that is at the heart of marketing.

2. We also put a lot of focus on getting things done, including coaching calls and mastermind groups to support members in moving forward on their marketing activities and projects.

3. The primary materials in the Club are audio and written tutorials on specific marketing strategies with lots of hands-on and how-to information and examples.

So I know I'm going in the right direction with the Club and will continue to support and enhance these areas.

Marketing Club Membership Drive - If you haven't yet checked out the Club, you can do so for one month for just $1.00. Then the fee is only $29 per month, for which you get over $250 worth of tutorials, coaching calls, expert interviews, mastermind groups and more, each and every month. Go to the link below and note the "Membership Drive" link at the top of the page.

http://www.ftmprogram.com/amember/signup.php

Comments

[Alan Weiss]

Tell me more about that Alan Weiss guy....

[Andrew Pritchard]

Thanks for sharing, Robert. And awesome work, Dave!!

Reducing price without reducing value in that situation is a rookie mistake. A carefully thought-through discount is fine in certain circumstances, but once you've actually named your price, that's it. If it needs to come down then so does the value. Caving in will absolutely destroy any credibility you may have had. And in many cases, the client *can* afford it, they just want to see if they can negotiate more favorable terms.

[Charles Dominick, SPSM]

One thing that I am interested in is everyone's perspective on the ORDER in which to present the three options as there are a few variations:

(1) Deluxe, then Standard, then Basic

(2) Basic, then Standard, then Deluxe

(3) Deluxe, then Basic, then Standard (as a happy medium)

In these times when the economy is pinching our prospects, I have been preferring the first option. It gives them the best solution, but then shows them what can be trimmed incrementally if budget limitations prevent them from investing.

Does anyone else have a preference for the order in which they present their "choice of yeses?"

[Jim Blanchard]

I had the same experience. Our client had wanted us to meet with each member of his team to discuss the program we were going to provide. When he asked us to operate within a specific budget, the difference was the fee for these individual meetings. We volunteered to provide the meetings as professional courtesy. Instead,he arranged a group meeting by phone which took a half hour and we are able to provide the rest of the project, the real meat, within his budget.
Lesson learned from that experience and your column: propose your program or project in pieces with specific value to the customer and you are defined. Be certain that your prospect understands the relative value to their program of each.

Thank you for your continuing excellent information.

Jiim Blanchard