If we want to charge a “high” price we need to anchor it against the return the client is going to get back.
And, for this, we can use a quirk of how our brains work called “The Primacy Effect”. I used it on my post yesterday.
Whatever our brain sees first becomes the most important thing within that context. In Profit First this is why we talk about Sales – Profit = Expenses, not the traditional Sales – Expenses = Profit. Putting Profit before Expenses makes our brain concentrate on it.
But it also works in proposals.
If you say “the cost is £1000/month” they think “that’s a big number”. But saying “implementing this SEO strategy will increase your sales by £12000/month” you prime their brain with £12000. Then you say “and your investment is £1000/month” they do an instant comparison and see £1000 is low compared to £12000.
There’s no deceit, no manipulation, we’re just making sure the client doesn’t feel unnecessary “sticker shock”. And, when I send a proposal to a client, I get a success rate of 86%.
Check out my post about pricing the other day and see how I used the same principle.
The trouble with raising your prices is the fear that always sits in the back of your head. I really struggle with it. One time I went to type a price on my website and my fingers literally froze. In the end I just left the price unsaid (and then, as ever, marked myself down when writing proposals).
(By the way, if you want a software project, I have strict criteria for the type of work I do and it’s £8000 for a prototype. I don’t actually do much software any more though; I’m all about teaching hashtag#profitfirst – price for that in the comments).
The thing is there’s always someone who will pay the higher price if you understand what they’re looking for. Why do some people have a mansion when a three bedroom semi would do? Why do some people own a Lambo when a Golf GTi is made by the same company? Why shop at Flannels when Primark is down the road?
If you know exactly who you target and what their problems are, you can charge more than everyone else. Because you’re not just selling a service, you are selling THEIR service. One that’s designed exactly for them.
So Step 2 of growing your business is “specialise”. Because it allows you to do better work in less time for more money. And that’s got to be a good thing, right?
I’m not really that smart.
I thought the name of my programme is quite clever – “the PDF Formula” – because it stands for Prioritise, Design and Finance and everyone’s heard of a PDF.
But none of what I do is actually original. I’m standing on the shoulders of giants and all that.
So if you don’t want to sign up with me, or you don’t even want to do my free Five Day Challenge, I can show you exactly how to follow my programme without being part of it.
- Prioritise – read “The 12 Week Year” by Brian Moran and Michael Lennington
- Design – read “The Pumpkin Plan” by Mike Michalowicz
- Finance – read “Profit First” by Mike Michalowicz
(Can you tell I’m part of Mike’s organisation, Profit First Professionals, as well?)
Because the point of the programme isn’t that what I’m showing you is new. It’s not some undiscovered gem.
These are all things that everyone already knows are effective.
The hard bit with all this stuff is actually doing the work. That’s where I come in – I make sure you do the stuff you’ve promised yourself.
If you want to do it yourself, then check out the books and go for it.
But if you’d like a helping hand then get in touch and we’ll see if it might work for you.