An old joke among engineers goes something like this: a plant is completely shut down. They frantically call in a consultant to figure out the problem. She studies the situation, walks into a complex network of piping, takes out a marking pen, marks an “X” on one of the valves, and tells them to replace it. Thankfully, this fixes the problem.
A week later the plant receives an invoice from the consultant for $10,000. Stunned, they ask her to itemize it. She replies that she would be happy to and proceeds to send them an itemized receipt: $5 for marking the defective valve and $9,995 for knowing which valve to mark.
Do you wish you could charge a premium for your expertise? Here is a hidden secret: your communications skills are what will help you get there as fast as your expertise will allow.
Think of the people you know – contractors, plumbers, speakers, consultants, or whatever – who command the highest prices. Let’s call them Premium Price Providers, or PPPs, for short. Here are some secrets that they use that most of their competitors never even think of:
They see themselves as merchants of happiness. Forget about selling products, or services, or even value. Their mission is to make you happy. Compare two speakers: one talks about his pedigree, his degrees, and his topic. The other talks about how you are going to have much happier employees, dramatically less conflict, or substantially more satisfied customers. And, of course, what a great experience all of you will have at her talk. Which one is the PPP? The second one, naturally. Speak from what your customers are thinking and focus on how to make them really, really happy.
They are never, ever defensive. In the world of a PPP, competitors are awesome, challenging questions are welcomed, and information is king. Why? Because the very act of defending yourself puts you in a one-down posture that you never want to be in. PPPs always rise above challenges. Repeat after me: “That is a great question … you have a point … other providers definitely have advantages … now, here is what *I* can offer you.”
They use solution language, not problem language. Once, I called an exterminator who was about four times as expensive as everyone else. When I questioned this, he replied, “Well, not every customer wants to pay what it costs to do the job right.” Is he a PPP? No, he is a jerk. And he probably goes around wondering why his teenagers won’t listen to him either. Never make customers feel stupid as a marketing strategy – instead, make it really attractive for them to try a taste of working with you.
They don’t boast – they credential themselves. Elsewhere on this site, you will find links to hire our genial host Carol Roth by the hour for business strategy sessions. Inexpensive? No. Worth it? Take a look at her credentials and you tell me. She doesn’t talk about how fantabulous she is; she focuses squarely on results for you. That’s how you want to sound.
Here is the one thing that I want you to take away from this blog: these aren’t just a bunch of tips. They are examples of a system, based on skills, that works well for me and lots of other people. Learn these skills – the same way you learn to play guitar or speak Spanish – and discover how much more you can profit.
So, what do you think? Are you able to charge premium prices? If so, how do you do it? AND if you don’t, what are you going to do to change that? We would love to hear your thoughts in the comments below.
Rich, these are really strong points that you've made. Sometimes it can be hard to stand up for your worth when there's enormous competition. I've learned that the smart customer/client does recognize "deep quality." You know things are really clicking right when a customer/client offers to pay more $$$ to "lock in/secure" your time and talent.
TheRelationshipInsider You've nailed it perfectly! Especially the last sentence: to me, the key isn't trying to justify higher prices, it's to build such great client relationships that supply-and-demand raises your prices for you. Thanks!
I would say we're not there yet - but getting there. We're working in an extremely price sensitive market where there is lots of undercutting - still, many prosper and there's no reason we can't be among them. I'm working on using more solution language. It really does make it easier to communicate the value of what we do. Thanks for the post!
writeahead Thanks writeahead! I presume you are a writer, and I am also (mostly ghostwriting and editing, when I am not speaking). Here is what is ironic: I personally am very noncompetitive -- and therefore do not price myself aggressively high -- but over time, great service and great client relationships have naturally pushed me past the low-end competition. When you are strongly solution-focused your *clients* put you in a better price bracket, because you are too busy to do otherwise. So good luck and let nature take its course!