Disclaimer: In celebration of my company Nel’s Tax Help, LLC completing its second year of business, I decided to share some words of wisdom to other new business owners that will help them along their entrepreneurial journeys. Tips provided are purely for informational purposes only. Enjoy!
You established your prices based on multiple factors. The cost of your time. The cost to operate your business. The value of your service and your products. What is average pricing in your industry. What you consider is an attractive and competitive price for your ideal client. Needless to say, as business owners, we typically do not pick random numbers from the sky when we establish our prices.
Yet you will always come across two kinds of potential clients that will take issue with your prices – the bargain shopper and the price terrorist.
The bargain shopper
This customer is looking for the most value for what little money they have. This potential client may honestly have a fixed income; and regardless of the value your business can bring to this customer, this potential client just cannot afford you.
This customer will even acknowledge that your service or product is valuable. But the money is simply not there and this potential client will accept the price you quote. This is that kind of customer that will either stay on a mailing list, go with a cheaper option, or merely fade away. This is the gracious customer between the two.
The price terrorist
This customer might have the same issues of inability to pay as the bargain shopper. But the defining difference between the bargain shopper and the price terrorist is the price terrorist has an attitude of refusing to pay your prices yet still wanting you to provide the service or sell the product. This refusal to pay attitude is usually accompanied by telling you why your prices must be lower — or why your prices are way too high.
The price terrorist will use scare tactics such as telling you no one will ever use your services or purchase your products at your price levels because there are too many competitors that are cheaper than you. The price terrorist will keep calling you back or emailing you asking you to explain what is included with your price in hopes to negotiate a feature or service to reduce the price. The price terrorist may even accept your price but then still tries to control the situation by insisting on establishing their own payment plan with terms the price terrorist created.
DO NOT NEGOTIATE WITH PRICE TERRORISTS!
Save yourself the headache. Just tell them that your price is your price. When they are able to pay you at a later time, you will gladly service them or sell to them at that time at your established price.
If you currently do provide an installment payment plan, stand by your established plan. Because once you start making changes to your prices and business model to accommodate the price terrorist, they will most likely ask you to change other aspects of your business. You don’t want to change who you are (see tip #1) for anyone.
Come back tomorrow for Tip #4: Have Good Cake – Marketing vs. Substance
Shan-Nel D. Simmons 