Everyone values things differently.
This strikes at the very heart of value pricing.
We need to use something called price discrimination. That’s the economists’ fancy label for charging different customers different prices.
I’m going to share with you several practical approaches to price discrimination.
You can watch the video here.
#1 - Every client is different
When we are pricing a client, we should be taking into account their own particular unique needs. Every client has different goals in life, different ambitions, different pain points. We need to understand the exact needs of the client.
We need to understand what the client wants so that we can present them with solutions that are right for them.
My friend Ron Baker has a great phrase…
‘You must price the customer, not the service’.
We need to make sure that each client is priced uniquely.
#2 - Menu Pricing
This is where we present our clients with more than one package. Typically 3, but it can be 4. Think of these packages as Bronze, Silver and Gold, or the Good, Better and Best strategy.
You should never give just one price. If you have a single fixed price, it’s the wrong price. It’s always wrong.
Every person has a maximum willingness to pay - the buyer’s reservation price.
When we present our price, the probability that it’s exactly the same number as they are thinking is so remote, it’s pretty much impossible. If a client says yes to your single fixed price straight away, you can be sure you’ve left money on the table.
If they say no then you’ve gone in over their reservation price and you are too expensive for that particular client.
You can’t win.
Give the client a choice. Present them with different packages and then they can choose the price that suits them.
#3 - Give more choices
We can give the clients choices outside of the packages.
You could give them choices over the speed at which they want the work doing or who in your team they want to deal with, for example.
We have no idea what the client is willing to spend. We are not mind readers. If we give them options they will choose their price for themselves.
If you want to find out more I run a free online training session every month where I teach subjects such as this one. In the session I will teach you more about value pricing and answer any questions you have. You can register for that here and I will send you an invitation to the next session.
And if you would like to join a community of like-minded accounting professionals learning to price more effectively and confidently, you can join my Facebook Support Group here.
Wishing you every success on your pricing journey.
Chartered Accountant, public speaker and author #1 Amazon best-seller, ‘Effective Pricing for Accountants’
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