premium prices
Premium Fees
Vocabulary
| devote | strategy | embarrass |
| drastic | common | undercut |
| fee | wise | premium |
| vendor | copy right | copywriting |
| consult | prospect | quarter (3) |
| glut | target | consequently |
| niche | dictate | overcome |
| qualm | ecstatic | supplement |
| obvious | specialize | competition |
| guru | field (2) | recognized |
| achieve | excellence | column (2) |
| lead (2) | pipeline |
Premium Fees
A common strategy for people starting a small service business is to undercut the competition by drastically lowering fees.
However, unless you are selling a product, this isn’t a wise idea.
Instead, your price should be somewhere around the middle of the top third in your market.
“But how can I charge premium fees and get orders?” you might ask. “Why should clients pay me more than what many of my competitors charge?”
Good question.
Copywriting expert Bob Bly lists five ways to earn top dollars.
1. Sell a dollar for a quarter.
Superstar marketing consultant JA likes to ask prospects: “If I gave you a dollar, would you give me a quarter ($0.25 coin)?”
Of course they would.
Anyone would!
ROI
And so your prospects will have no qualms about paying a high price . . . as long as you give them “a dollar for a quarter.”
If your service saves or makes them money — many times more than your fee (i.e. a huge return on investment, or ROI) — you can command big rates.
Add Value.
As a top copywriter, HD gets huge fees to write direct-mail packages.
So what’s his secret?
After writing a package, he gives his clients a bonus: marketing strategies to sell even more of their products (most other copywriters don’t do this).
If you were to pay HD separately for this consulting advice, it would cost thousands of dollars. But he gives it free when you hire him to write for you.
People don’t mind paying more — as long as they get back more.
2. Find an Under-Served Market Niche.
The market has a glut of certain services. Likewise, some companies are bombarded by potential vendors.
Consequently, these popular prospects can pick and choose vendors . . . and dictate prices.
Niche Market
Such is the case with copywriting. Most direct-mail copywriters seek out obvious companies, such as nutritional supplement makers.
WD’s prospects however are ecstatic about him and pay hefty fees.
Why?
Because he specializes in trade with virtually no competition: construction companies in Idaho, his home state.
3. Become a Guru in your Field.
Most management speakers get around $3,000 for a one-hour speech.
Tom Peters meanwhile, earns $30,000.
Does this mean Tom knows 10 times more about managing a company or that his advice makes his clients 10 times more money?
Not really.
Recognized Guru
He can charge 10 times more because he is a recognized management guru.
How did he achieve this?
Largely due to his best selling books, especially In Search of Excellence.
You too can become a recognized guru in your field. You can publish a “how-to” book … write in a magazine or newspaper column … create a content-rich website … give lectures and speeches.
4. Generate Leads to your Business.
The number one reason why people in the service industry charge too little is that they need the business.
What’s the secret to overcoming this?
Keep your pipeline of leads full at all times.
Generating Leads
Generate twice as many leads as you think you need . . . and you’ll always have more work than you could ever hope to handle — in which case can decrease the number of clients by raising your price.
There are many ways to generate a steady stream of leads: classified ads … small display ads … fliers … Yellow Pages … cold calls … direct mail … pay-per-click advertising … Craigslist …
You can — and should — charge close to top dollar for your services. So figure out how to put at least one of these strategies to work for you immediately.
Questions
1. According to Bob Bly, you shouldn’t charge very low prices. Yes or no?
2. “Sell a dollar for quarter.” What does this mean?
3. Explain the idea of finding and carving a niche. Give examples.
4. If a guru earn ten times more than an average person, is he or she ten times smarter, better, more knowledgeable or experienced?
5. How can you become a recognized guru in your field?
6. How do you “keep your pipeline full”?
A. Are all these ideas simple common sense?
B. How can or do you apply these tactics to your business?
1. How do you sell a dollar for a quarter? Do you add value or give bonuses?
2. What is your or your company’s niche?
3. Are you a recognized guru in your field? How could you become one?
4. What ways can you increase your pipeline?
