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The Difference Between Price and Value In Doing Business

 Let's talk about price and money and fees. And so for today, I'd like to talk about this idea of prices and fees. One of the mistakes that I made very early in my career and I've made it throughout my career as well, hopefully not so often these days, is to believe that people are price-sensitive.

The Difference Between Price and Value In Doing Business

Yes, some people are price-sensitive. But I have to admit that thinking about this and considering the various people that I've dealt with in life, there are actually very few of them that are actually price-sensitive.

Now it may well be that the marketing that I put out there in the marketplace does not attract price-sensitive people. That might be part of the solution. But what I have found is that people aren't price-sensitive, they are value-sensitive.

However, because a lot of people in the coaching, consulting, speaking, training,
and small business areas believe that people are price-sensitive, then they focus too much on price.

And they're concerned too much about price. And part of their marketing focuses so much on price that in fact, they get the opposite result to the one they really want. So the key part of this message today is this.

Is firstly let's think about fees. And then we'll talk about prices. Fees tend to be for services that we provide, doesn't it? And I've found that the vast majority of coaches, consultants, speakers, and trainers that I've dealt with over the last, say 27 to 30 years were...

I was going to say all, but yet pretty close to all undercharging for the value that they were bringing to their clients. And when I explained to them to think carefully about the value they delivered.

And the financial impact for many of them,
for the value they delivered. And different ways of positioning their price, then they started to test the marketplace. And the testimonials I've had back over those years have been amazing.

Read More: Consistency Is The Number One Key To Success In Business

I remember one particular guy, I don't wanna use his name because it won't be appropriate in this context, was charging £400 a day. Which was nowhere near the value that he was delivering. And over time he moved it to just naught more.

In other words £4000 a day. People were delighted. He wasn't ripping anybody off.
He was providing value. I've had other clients who instead of charging a day rate have charged a delegate rate.

And doubled their previous day rate. And it was still massive value for their clients. So when it comes to fees, the very few clients are price-sensitive. Yes, they're all value-sensitive. I'm sure that's true for me and you as well.

Now when it comes to products again. Products are a little more tricky because you can have another product in the marketplace that can be similar or apparently exactly the same.

But similar and therefore it's easy to get shopped as a commodity. As though it was a loaf or a bottle of milk. "This one's this much and this one's this much. I'll buy the cheap one because it makes sense to do so."

So it is trickier. But when we position what we have. Let's say this is a product with various add-ons, with additions, maybe with additional... Maybe some coaching or some follow-up or whatever it might be. Then we can position that away from being a commodity that looks like another one.

So the takeaway for me and you know whenever I record these for you, I'm always talking to myself as well. The takeaway for me is to say, "Hang on a minute, Peter. Is there an area where with my pricing I'm becoming price-sensitive
instead of value sensitive? Regardless whether that's fees or products."

Maybe that's the same idea you could take away as well. And maybe consider that when you're thinking of the upcoming year and what you might do. What turnover you might do, what profit you might do. And how you can do that by sometimes doing less.

But doing it for clients that appreciate the value that we deliver. If you've got any comments or questions on this, then by all means put them down there. I'm always happy to answer them.

And I will see you on the next one. But in the meantime, I wish you every success in all your adventures in life. As you have freedom from anything that may have held you back.

And freedom to be, do and have Whatever you set your heart and mind upon. See you soon. Take care. Bye-bye 

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