Recently, I was in Costco and was drawn to something I hadn’t seen before: sushi.
I love sushi.
It’s not something I expected to see at Costco.
My first thought, when I saw this full case, was probably the same as what you might have as you read this: is it any good?
I was standing next to a guy who was also looking at the case, and I could tell he was wondering the same thing.
“Have you tried their sushi,” I leaned over and asked.
“No, I haven’t,” he said.
“That price seems awfully low for how much you get,” I said.
“Yeah,” he said. “I was thinking the same thing.”
We both stood there for a moment, scanning the case for an answer.
“I think I’m going to pass,” I said.
“Me too,” he replied quickly. “Have a great day.” And off we both went, with no sushi in our respective carts.
"Too Good To Be True"
It’s not just the price that gave the two of us pause. It’s a large quantity in that container as well. I wasn’t expecting top-grade sushi, but the price, for the large quantity, just seemed too good to be true, even if I wasn’t expecting the best.
These situations happen in professional services too often, most particularly for solo and small firm service providers. Service professionals, particularly those just starting out, try discounting in an attempt to attract clients. It rarely, if ever, works out too well.
Buyers of professional services are like sushi fans: quality is an integral consideration in the buying decision. Sure, there are a minority of buyers for whom price is the most important, if not the only, consideration. This group of buyers rarely, if ever, represent a fertile place to find best-fit clients.
Most buyers of services, whether legal, consulting, accounting, or some other service, weigh some combination of the perceived quality of the service and the price they’re asked to pay for that service. Whether they are an individual, a small to medium-sized business, or even a larger corporation, the overwhelming majority of buyers are value-sensitive. The only differences between them are in how they value the various elements of the service, the service provider, and the outcomes they derive from the service.
Price is an indicator of value, particularly when it’s hard for a buyer to judge the service provider and the service itself. If a buyer perceives a service providers pricing is to low, they may wonder whether
The Repercussions of a Bad Buying Decision
With a $13 tray of sushi, the cost of making a mistake, from the buyer’s point of view, is low. All they’ve lost is $13 and one bad meal.
In other words, there’s not much risk in deciding whether the sushi is “too good to be true.”
With a B2B service, however, the risk is much higher. The investment a buyer is being asked to make starts in the thousands of dollars and can go much higher.
The consequences of a poor decision, therefore, is quite high. The cost is not just the money lost, though. It’s also in the wasted time, the opportunity cost, the forgone opportunities that hinge on the successful completion of a project, and more.
A buyer’s perception of value, therefore, and the ultimate decision they make becomes even more critical.
You’ve Got to Ask
Your service, whether legal, consulting, accounting, or some other service, has many different facets. Different clients will view service elements like speed and method of service delivery, skills and experience of the provider, speed of realized benefits, and warranty of outcomes, just to name a few, much differently.
To understand a buyer’s perception of value, you’ve got to ask. You must have value conversations with your prospects (and even after some of those prospects become clients) so that you can understand how and where they see value in the different elements of your service and in the transformation you can deliver.
Further, conducting value conversations with your prospects and clients represents an important expression of what I call the The Generosity Mindset™. You are showing respect for the risk, both tangible and intangible, a client is taking in the buying journey, particularly for a service they don’t fully understand but know that they need.
Effective value conversations are never just about maximizing your price. Successful value conversations are an act of generosity, making sure clients are making good choices for themselves and their business.
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Business consultant and coach, author, and podcaster John Ray advises solopreneurs and small professional services firms on their two most frustrating problems: pricing and business development. John is passionate about how changes in mindset, positioning, and pricing change the trajectory of a business and the lifestyle choices of a business owner. His clients are professionals who are selling their expertise, such as consultants, coaches, attorneys, CPAs, accountants and bookkeepers, marketing professionals, and other professional services practitioners.
John is the author of the national bestselling book, The Generosity Mindset: A Journey to Business Success by Raising Your Confidence, Value, and Prices. The book covers topics like value and adopting a mindset of value, pricing your services more effectively, proposals, and essential elements of growing your business. The book is available at all major physical and online book retailers.
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