Stay Sane with Premium Pricing

avatarYou might have noticed in my previous post, when I was talking about the right reasons for someone to buy from you, that I didn’t mention price. Value, yes, but not price.

That’s because you don’t want price buyers.

I’ll repeat: you don’t want price buyers.

Price buyers will squeeze your profits to the point where you have zero room for manoeuvre. Given the chance, they could even drive you right out of business. And why shouldn’t they? Your business isn’t their concern.

They’ll sometimes show that in other ways, too, by being the most demanding, difficult and uncooperative customers you have. If you’ve observed the 80/20 principle, you’ll understand exactly how that works and why you must concentrate on the top twenty, not the bottom eighty percent of your customers.

Better still, only take on the top twenty percent of potential clients in the first place. And you can do this by pricing the rest of them out of your business with premium pricing.

You might have noticed I’m not cheap.

There’s no ‘going rate’ for what I do and there needn’t be a going rate for what you do, either. The whole ‘going rate’ thing is a myth, unless you want to go along with the majority and just get by.

And don’t get me started on price wars. Unless you’re Asda or Tesco, you can’t afford to even contemplate undercutting your competitors. Concentrate on being the best, or at least totally unique, and charge accordingly, then you won’t have any competitors to undercut.

Do better and charge more. Then you can afford to do pay more yourself, and so get better suppliers, employees and services. All of which will improve your products and services, meaning you can charge more, and so on. The alternative is the opposite route, of penny pinching, poor service and a downward spiral into mediocrity, at best.