Do you remember the Cobra beer advert? Where the guy who ran the company had a beer company and a bra company? And he was this good looking Indian fella with nice hair who was relaxed and did yoga at work?
(I know what you’re thinking – “Baz is talking about himself there” – sorry to disappoint you; good looking and nice hair, yes, but bras are still a mystery to me)
The thing with that advert though, is it’s probably the first time I saw a positive image of an Indian male on TV ever. I must have been in my late 30s, early 40s when I saw it.
That’s my whole life seeing people like me being represented as nerds with bad hair, who are general failures in life. That have to be rescued from social embarrassment by their pretty white friends.
A whole lifetime.
This stuff matters.
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?