I was on a group page a few minutes ago and one person posted that the quote she received for some service was too high.
Then like vultures circling a dying animal they flew in.
About 30 people chimed in and said how “affordable” they were and they would never dream of charging those high rates.
Ironically, the person whose prices were high has been in business for years, knows their target audience, knows how much to charge and is making a profit.
The vultures (the people claiming lower prices) will most likely be out of business as they have no idea who their audience truly is, what to charge for their service and they rarely think about profits.
The dream of having a successful business never comes to these people because they are too focused on going after the wrong market.
I was like that when I first started out. In 1995 I created a carpet cleaning business in my town and thought if I could offer lower prices than my competition I would really clean up.
My slogan at the time was, “We clean you carpet, not your wallet.” I wanted people to know I wasn’t going to ripped them off.
Unfortunately, I soon found out that the people that I was attracting with my low prices were people that had no money, had the trashiest carpets and didn’t really value my service they just wanted a cheap price.
After about 3 years I discovered I was slowly going bankrupt. I was spinning my wheels, so to speak. The money coming in wasn’t enough to pay for overhead, new equipment, advertising or employees.
So, I could either sink with the ship or do something completely opposite of what I had been doing and turn a sinking ship into a flying ship.
That’s what I did.
I looked at all my competition, what they were charging, what they were delivering and how they advertised. Then I raised my prices.
In fact, I raised my price to be 30% higher than the highest price competitor service.
And for the next 17 years…the business grew and thrived. I was able to buy newer, bigger equipment. A bigger house. And we enjoyed many vacations.
And when it was time…I sold it. And for a nice profit.
I couldn’t have done any of that if I continued to think like my competitors and keep my prices low.
Moral of the story: Don’t be a vulture…learn to go after clients who aren’t in dying mode.
Rob is affectionately known as “Mr. Sarcasm” to his friends - to everyone else he’s a Certified Digital Marketing Strategist, a Foremost Expert On Specialized SEO, a Best Selling Author, Podcaster, Speaker and Authority Broadcaster who can help amplify YOU to your audience.
Rob has authored, coauthored or produced over 36 books covering social media, search engine optimization, podcasting, copywriting, personal injury law, weight loss, military law, life lessons, scams, sarcasm, customer service and more. His book clients include lawyers, speakers, doctors, real estate professionals and more.
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Good info…not only does this apply to customers who are ready to die, but ones who are simply broke to begin with. It is never a good idea to work with someone who wants something for nothing. When you charge a premium price, you have to be ready to deliver, but it will make you life much easier in the long run. A fewer high paying customers is better than lots of broke ones.
I started a business and also charged low rates to get customers. I learned that low paying customers are also the customers who complain the most and cause the most stress. When I raised my rates I found customers who appreciated the work and didn’t mind paying the rates.
I told one client what my competition charged and she got all upset and said she would never pay that and never called me again. Funny thing, I didn’t tell her I would be charging what my competitors were charging, but I knew she would fire herself if I told her that.
When I examined my numbers, I found that a third of my income came from 2/3’s of my time and a 2/3’s of my income came from 1/3 of my time. I cut my income by a third and freed up 2/3 of my time.