I was at a networking luncheon recently where a sales trainer was giving a talk about how companies often race to the bottom when it comes to their pricing.
“Over 51 percent of customers say they buy on price first,” he said. “So what do salespeople do? They lower their price to grab the sale.” That means more than half your potential customers are not interested in whether you’re the best person for the job, they want you to be the cheapest.
“The problem,” a promotional products salesperson said to me later, “is that those clients will turn around and dump you for a dime.” She told me about a nonprofit she had been working with for five years, and she recently lost them in a carousel of marketing coordinators and the old “you have to get three proposals” shuffle.
Never mind she had given them decent pricing for the past five years. Never mind that she had bent over backward to meet frantic deadlines (thanks to their own bad planning), or made deliveries herself to ensure they had what they needed just in time for some event or other.
There was a new marketing coordinator she didn’t have a relationship with, and she was gone. (My friend is determined to win them back though, without compromising on price.)
That got me to thinking about how I do what I do, and why I charge what I charge. I started thinking about what I’m “best at.” Which of my skills are more defined and developed than any of my others. And which of those skills I can offer to potential clients as a premium and not a “me too” service.
For those of us in the service business, especially freelancers, the one thing we have to offer is our “Best At,” that thing we do better than anyone else.
If you can identify your Best At skills, you can work with the right clients all day, and never have to scrape bone for those price-focused clients. But if you focus on price because you can only offer the same general service as everyone else, you’re going to have a tough time finding lasting success and loyalty.
Freelancers, What’s Your ‘Best At’ Skill?
For some freelancers, their Best At skill is photography, but not just photography. Their forte is art photography, or sports photography, or business headshots. For others, their Best At skill is accounting, but not just regular accounting. They specialize in small business accounting, or forensic accounting, or fast food franchise accounting.
If you can figure out what you’re Best At, you can define your niche. It’s not just your passion or that thing that speaker said at that seminar. It’s the thing that you can do better than anybody else, even if it’s just a tiny small difference from everyone else in your field. It’s the thing you practice and focus on, over and over, until you can do it in your sleep.
I’ve got a photographer friend whose top skill is shooting business headshots. He’s great at other photography, but very few people shoot business headshots as well as he does. As a result, he’s able to get work from area corporations and charge his professional rate. No one is trying to get him to drop his price in exchange for exposure. No one is telling him, “I have a digital camera that’s just as good.” No one is trying to nickel and dime him, asking for discounts in exchange for less work.
He has planted his flag on Headshot Hill and people are willing to pay his rate, because they know he’s the king of that hill.
Another friend specializes in long-form video with lots of visual effects. He’s hired by larger companies with larger budgets to produce long videos that tell their brand story. The companies that want someone to interview talking heads with an iPhone can’t afford him; the companies that can afford him want something more than talking heads and iMovie special effects. He’s planted his flag on his own hill, and people are willing to pay what he asks for, because he’s the king of that hill.
The Other 49%
Earlier, I mentioned that 51% of customers are focused on price first. That means a majority of your potential customers will throw you over just because they found a competitor that will do it for 5% less than you.
You don’t want these customers. Sure, they’re nice, because they’re a source of revenue, and we always need revenue. And if you need the work to feed your family, you should take every cheap client you can until you can find better ones.
But I’ve found that the price-driven customers will eke every little crumb out of your relationship, bleed you dry with feature creep, delayed payments, and demand the most attention while being the smallest portion of your revenue.
So don’t get attached to them, and never, ever try to build a business on being the lowest-priced vendor they’ve got. That just speeds you along the road to failure.
Instead, focus on the other 49% that care about craftsmanship and quality. Focus on the 49% that knows your work is going to be seen by the public, run their company, or make their lives easier.
If you’re an accountant, it’s your work that’s going to keep them out of trouble with the IRS and out of jail.
If you’re a digital marketer, it’s your work that’s going to drive their marketplace exposure and generate their revenue.
If you’re an IT professional, it’s your work that’s going to keep their network running and safe from cyber attacks.
These are jobs that should not be left to the lowest-priced provider. These are the people whose work can make or break a company. If clients buy these services on price, they’re going to get burned badly with damages and recovery costs that run 10 times as much money as they saved.
A couple months ago, a prospective client asked me to justify my pricing, given that some freelancers would write blog articles for only $5. So I shared my 20 year background, detailed my list of publications and the books I’ve co-authored, and explained my various specialties. I also pointed out that the $5 writers typically did not have a mastery of English, probably plagiarized or re-spun a lot of their work, and that she would spend so much time editing and rewriting their work, it would eat up all the money she had saved by buying the cheapest option.
And I stood firm on my price.
Of course, I never heard from her again, which was fine with me. I knew she would never be satisfied with my price unless I charged $4 per article. That’s the kind of customer I don’t need, and the kind I’ll never work for.
That’s because I know my Best At skill, and I work to get better at it every day. I read, I study, and I practice. I hone my Best At skills the same way a professional athlete works to keep in top shape for their job.
I don’t just want to be the best I can be, I want to be one of the best in my industry. That way, when someone comes to me and asks me to lower my price to be more in line with what less experienced writers are charging, I can say no.
Because I don’t want to be driven by price and spend my day chasing down client after client whose only concern is whether my writing is the cheapest they could find, with no concern of quality.
Photo credit: Erik Deckers