From the October 2000 book “Full Price: Competing on Value in the New Economy” by Thomas J Winneger he divides potential customers into three categories:
1) 17% “Custom Clients”, they are “wonderful people”.
2) 56% “Vacillating customers”, they don’t know what they want, they vacilate between high end and low end, on Saturday they are looking for clothes at K-Mart, on Sunday they are looking at Brooks Brothers.
3) 27% “Standard customers”, they are coupon clippers, “They eat up your limited resources and generate little, if any revenue or profit. They generally cause more problems than they are worth.”
18 years later I think that distribution still roughly applies.
At the beginning of Chapter 7 Educating the Customer author Thom Winneger writes:
—“Educated customers don’t go away from great products regardless of the price.Today’s customers actively seek to ‘understand’ as much as ‘to be understood’. I call it the “know-a-bility” factor. However, information simply for the sake of information is not what drives smart companies to inform their customers about their products or services. I cannot begin to tell you the number of companies I see who put out a seamlessly endless proliferation of confusing and often worthless information with the intent of educating their customers. Smart companies understand that “know-a-bility” is delivering the particular information that addresses your customers specific means.”—
I recall 35 years ago I was out clothing shopping for another pair of work pants along with a new shirt and a tie for a wedding I was going to attend. In the store I typically shopped in I a Ralph Lauren Polo blue jean jacket and I thought it looked GREAT so I went over to get a closer look and noticed the price which was $185!!! Back then a typical Lee or Levi’s jean jacket cost maybe $25 so I was blown away at just how much that jacket cost. So I went on with my shopping and picked out another pair of work pant and a great tie. I used to always buy clothes to match the tie instead of the other way around and as I was looking for a new shirt I began to think,…”Ya know I can really get by for a while with just the work pants I have and I have plenty of good ties and shirts in my closet but I REALLY REALLY WANT THAT JACKET. So I put down the stuff I had already picked out and went back a bought the $185 blue jean jacket and never looked back.
When I go into a computer store I want a MacBook Pro and when I am hit with the reality of how much they cost I don’t ever think “Well I’ll just buy a less expensive laptop running Windows”. I want the Mac.
Likewise with a lot of the tools I have bought over the years. I want what I want and would find a way to pay the premium price.
On the other side of the coin if I am buying just a t-shirt of polo shirt to wear when I am working around the house I am NOT going to buy the $59 dollar t-shirt or the $89 polo shirt I saw at Orvis. I’m going with the $6 shirt from Walmart or the two $12 shirts from Amazon Basics I bout this past week.
If clients REALLY want the $78,000 bathroom remodel they will adjust and do what it take to get the $78,000 bathroom remodel. If their criteria is I want a remodeled bathroom and I only want to spend $18k I move on and look for a bathroom I can get for just $18K.
By posting sample pricing on your website and following Marcus Sheridan’s “They Ask and You Answer” 5 steps to creating a pricing page that works include the following:
1. Share which factors drive the price of the product/service up.
2. Conversely, explain which factors drive the price down.
3. Recognize that some companies may charge a higher rate, and explain why.
4. Do the same with companies that charge lower rates.
5. Share the upper and lower price range of your typical client budgets.
…you are pre-qualifying your clients and won’t waste your time talking to leads that are just not going to pan out for you.
While Winneger’s book was published in 2000 which is a century ago in internet time I think this relates directly to what Marcus Sheridan (of The Sales Lion, River Pools & Spas) and now /MarcusSheridan.com) writes and lectures online about from his 2017 book “They Ask You Answer: A Revolutionary Approach to Inbound Sales, Content Marketing, and Today’s Digital Consumer”.
From Marcus Sheridan’s “They Ask, You Answer…”:
—”Inbound Marketing,” as I understood it, was simply the process of attracting (instead of chasing) customers. And “Content Marketing,” was simply the act of teaching and problem-solving so as to earn buyer trust.”—
You can build trust and current popular phrase TRANSPARENCY on your website by publishing some project pricing and the reasoning for what they cost what they cost.