"your Price Is Excessively High" Truly Means There Isn't Enough Value

If you have been in business very long, you have probably had a litany of customers proclaim, “Your price is too high.” Although it is common to consider such clients as tire kickers, I suggest you look at the situation from a different perspective. What the client is telling you is that he does not perceive adequate benefits in conducting business with you to validate the cost-he doesn’t see the value.

I received an email recently that makes this point:

Value = Perceived Benefits / Price

If two companies or projects appear the same to the customer, the perceived benefits are equivalent. The value that the customer gets therefore, will be figured by the cost. The lower price delivers better value.

However, a higher price can be obtained if you are offering more benefits--and thus more value--to the client. That is, as the perceived benefits expand the rates you charge may also rise, and the customer will simultaneously get greater value.

There can be various methods to do this, and most involve slight expense. Plus, the expenses that are involved should be part of the price you give to the client. Here are several examples of ways you can enhance the perceived benefits:

Accept credit cards
Have a web site
Provide the client an information package concerning your service
Offer an exterior upkeep program
Give the customer a reference list
Obtain certification on deck care, ventilation, etc.

The cost of these benefits is likely less than $1 per man hour (this will depend on the number of workers you employ in the field). Yet, by offering such benefits you can raise your price $4, $6, $8 an hour or more. That is, the return on investment is large.

Granted, some clients won’t care about many of these benefits. And that is why it is so important to offer as many benefits as you realistically can. The more you provide, the more probable that a number of them will appeal to a individual client. That is, the more benefits you offer the higher your rates might be. (Needless to say, there is a cutoff point to this.)

Consequently, the next time a customer states, “Your price is too high,” bear in mind that he is actually saying, “I don’t notice the value.” If you need to charge a higher price, you should provide more value, and that means extra benefits.

By: JJ Branderson

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