Cathy Stucker - The Idea Lady

Attract Customers and Make Yourself Famous

Time Is Money–to Your Customers and to You

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Will your customers spend more money if it saves them time?

With all of us feeling more pressed for time these days, it is likely that your customers are making decisions about where they spend their money based on convenience. Yes, price and quality are important, but time has become an important part of our buying decisions. Customers are more willing to do business with companies that save them time, even if it costs them more money.

When I had more time than money, I was willing to spend time to save money. These days I find myself less and less willing to do so. I will pay more if it saves me time–and aggravation.

How does this affect your business? To get and keep customers make it easy for them to do business with you. And don’t be afraid to charge premium prices if you deliver convenience.
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Talking About Price

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talking-about-pricingYou’ve created a great product and now you’re putting together your sales page. You’ve got the attention grabbing headline, the benefit laden lead-in, lots of bullet points and a few testimonials, too.

Oh-oh. How do you tell them the price? WHEN do you tell them? Should you try to hide it inside the text? Should you place it up top? Should you not discuss price at all until they click the add to cart button and get to the next page?

Well, it depends. It depends on the value vs price, on how targeted the prospects are, on the price point itself, on how the prospect got to your page, etc.

Here are some helpful tips that will make the process easier for you.
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Just Say No to Free

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A while back I got an email from someone who wanted to meet with me so he could ask some questions. Think about what he was asking: He wanted me to get in my car and drive somewhere to meet up with him, so I could give him answers–for free, of course–that he could have gotten by buying my book. But the book would cost him a few bucks, so that was not a good solution.

I thought I would be nice, so I asked him to email a couple of questions that I would answer for him. He insisted that we had to meet and discuss this in person. Well, I don’t even do paid consultations in person any more, so I told him we could set up a telephone consultation and told him my rates. His response? “Well, if you are going to charge me, forget it!”

That is the kind of “customer” that I am more than happy to see go. In fact, I would gladly have given him the names of a few of my competitors so he could waste their time instead of mine. (Nah, that would be bad karma. ;o) )

There is nothing wrong with giving away some things for free, whether you are establishing a new business or you have been around for ages. I give away a lot of free content, sometimes do free teleseminars and webinars, and answer the occasional question. However, it is important to know where to draw the line, and how to say no to people who want more than you are willing to give. For me, there is a firm line when it comes to giving away my time for little or no return.

Not sure when you should work for free? Take a look at this hilarious flowchart from illustrator Jessica Hische. (Note: The chart includes language some may find offensive.)

And here are some tips to help you figure out when and how to say no to free.

Set limits. There are always people who will call or offer to take you to lunch to “pick your brain.” That is called free consulting, and it is a mistake to do it. If someone calls with questions, and you want to help them, set a limit right up front by saying something such as, “I have 10 minutes right now. If you need more time than that, we can schedule a consultation at my regular rates.”

Leverage the free stuff. Spending a lot of one-on-one time giving free advice is probably not the best use of your time. When you are going to do something for free, look for the activities that will give you the best results and best reach for the time you invest. Instead of having lunch with one of those people who want to pick you brain, hold a teleseminar and invite everyone on your list. Record the teleseminar and give the recording to everyone who signs up for your email list, or sell it as a download or on CD. Spend that hour reaching thousands of people instead of just one.

Limit access. Have someone else deal with your phone calls and emails so you don’t get in the position of responding to routine questions that can become time consuming. That also gives you a buffer so that your assistant is the one saying no to unreasonable requests, not you. Set up a “help desk” (Many webhosting companies, including http://MyFavoriteWebHost.com/, offer free help desk scripts.) and get a virtual assistant to handle inquiries.

Establish a pro bono budget. Just as you set a budget for how many dollars you can donate to worthy causes, set a budget regarding the time you can spend on free work. It is fine to do some unpaid work to help worthy groups or individuals, but you will find yourself overwhelmed with “opportunities” to work for free unless you have a firm policy about how much free work you will do and how you decide for whom you will work pro bono.

Don’t be afraid to ask yourself, “What’s in it for me?” When you are asked to do something without pay, there is nothing wrong with choosing the unpaid work that benefits you in some way over that which does not. If you only have time for one unpaid speaking engagement this month, choosing the one that allows you to speak to a room full of potential customers while turning down another that is unlikely to result in any business for you is the only sensible thing to do.

Only you can decide how much you are willing to do for free. However, don’t get caught in the trap of giving away more than you want to because of the unreasonable expectations of others or because you are unwilling or unable to say no.

Establish a firm policy about what you will do without pay, and stick to it.

The Value of Free

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Do you offer gifts or bonuses to customers and potential customers? While everyone likes getting things without paying for them, bonuses mean more when customers realize the value of the thing they got at no cost.

When you give customers an extra product or service, or a special gift such as a booklet or audio tape, make sure there is a price attached to it. For example, you might invoice for the entire cost of a service, then apply a credit to the invoice for the value of the giveaway. This is a vivid reminder to them that there is an associated cost, but they didn’t have to pay it!

Physical products may have a price tag or printed price on them. I print prices on booklets I use as promotional giveaways or bonus with purchase, even though these booklets are typically not sold separately. The point of the price is not to create an artificial value, but to demonstrate that the customer got something worthwhile without paying the price.

Help your customers see what the things you give them are worth! 

When to Raise Your Prices

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Setting prices is one of the hardest things for most small businesses and solo practitioners to do. How much is enough and how much is too much? 

Most small businesses err on the side of charging too little. A solo practitioner may base their hourly rates on what they earned as an employee. However, that does not take in to account the differences between employees and entrepreneurs.

If you base your hourly rates as an entrepreneur on what you earned as an employee, you will be out of business in short order. Employees get paid for every hour they work (and many that they do not work). You get paid for “billable hours” when you are actually doing work for customers. Employees do not have to pay the cost of their workspace, supplies and equipment and other overhead. You do.

Some small business owners believe that they must charge the lowest prices in order to attract customers. Although it is true that WalMart does a lot of business, so do Neiman Marcus, Nordstrom’s and other high-end retailers. You do not have to have the cheapest price, only the right price for your target market.

So, to get to the nitty-gritty: How do you know if you are charging the right price? Here are some questions to ask yourself:

How much do your competitors charge? You may be able to find the answer by doing a bit of research, online or off. Do you offer more value than the competition? Your prices should reflect that. Do not compete only on price.

What does your target market expect? If they have higher than average expectations about service and quality, they probably expect to pay a higher than average price. You will not lure them with cheap prices.

Are you attracting the right customers? Low prices can attract bargain hunters who will require more service than customers will to pay a higher price. You will spend more time for less money, and still end up with customers who are not happy.

Do you have enough business? If you are not meeting your revenue goals, it may be that your prices are too high– but it is more likely that they are too low. Higher prices create a perception of higher value.

Do you have too much business? If you have more customers than you can handle, your prices are definitely too low. Raising prices may allow you to make more money in less time with fewer customers.

This is a good time to examine your prices to make sure that what you charge compensates you for the value you provide to your customers.