If you are in the consulting business, you’ve most likely came across the issue with finding the right price for your services.
I am asked this all the time. So here are my thoughts to this subject.
Whatever you think your problem might be, more than likely it has nothing to do with your customer not wanting to pay or not being able to pay, but everything to do with your customer not understanding what he is paying for. He does not understand the value and how he in return can get value out of it.
If you go shopping and buy a pair of jeans, you’ll know you have to pay money for it. Branding and Image is most likely important. You buy the jeans, put them on and you know what you’ve paid for. Even in a month’s time, you can still see and touch the jeans, you can even sell the jeans to make money out of them.
Now, let’s look at a different scenario.
Let’s say you need an accountant to do your books. You also know you have to pay for this. The real difference is that when the accountant did his job, there is nothing left. Nothing to look at. You will always try to get the cheapest price or best deal and branding or image is far less important (for most).
Understanding wants and needs
What is the difference between those two scenarios? In the first scenario the customer wants to buy. In the second scenario the customer has to buy.
Whenever you **want** something, the most likely reason you want it, is because it resonates with you. You can see yourself with it and it feels good. This feeling is created through branding and image.
Whenever you **need** something, the most likely reason you need it, is because you are in trouble without it. You see yourself without it and it does not feel good.
The first scenario is straight forward, but as a consultant you work mainly in the second scenario. You work with people who have a problem and need a solution. We don’t really want to deal with problems if we can avoid it. You might think that having a solution is the solution and talking about their problems is going to make them want your solution, but in my experience the opposite is the truth. Nobody really wants to talk about problems if they can avoid it.
Working out the positives and negatives
If you look at it from a plus/minus scale, then everything that is minus is negative, zero is manageable, but plus is wanted. The same goes for pricing. We always try to find the zero. If you buy the product you want, after an initial period of adjustment, wherever you are or whatever you have then becomes your new zero.
Any change of that situation, like the loss of the product you’ve just bought, becomes a minus (a problem) and after a period of time you adjust your zero to that situation. So your zero is constantly moving up and down, adjusting to your current situation.
When I work with customers, I try to figure out what their current problems are, but not to talk to them about it, but to figure out if I can provide them with a solution that brings them at least to zero, but if possible to a plus. With my customers I only talk about the plus. That is where the value is. Sometimes that might be difficult, because they are so far in the minus and have not yet adjusted their zero to that point, that a solution that will bring them to plus is not possible for me.
With this in mind, your services or products must achieve two things: bring the customer back to their current zero and provide a path to a plus. Most money is spent in the plus section and the least money in the minus. Translate this to products and services, the products or services adjusting to zero are the least paid for, but whatever goes to plus is the most paid for. Create your products and services accordingly.
Depending on your sector, there are different ways to this. But think about it and always ask yourself the question:
Where will my customer be when I am done?
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