Ex-lawyer turned relationship coach

Competing With Inexpensive Competitors

Starting your own company is tough for many reasons. One of the biggest challenges small business owners face is dealing with cut-rate competitors. 

Because why should someone do business with you if he thinks he can get the same for less?

Unless you know what to say, you’ll probably be pressured into a discount deal or offering extra services that slash up your profit margin. Now you’re earning almost as little as you did on your ex-boss’ payroll.

To have a successful business, you must know how to get people to happily pay your premium rates.

And that starts with saying goodbye to hourly rates. 

You can’t charge a premium by selling hours. Nope, not even if you charge a fixed fee based on an hourly rate.

If you want to charge a premium, your clients must know the value of your services. 

Because without a clear picture of the value, there’s a chance they may be getting a shitty deal.

And no one wants that.

So step away from the idea of hours and embrace the idea that your services are solving a problem.

The key in pricing is figuring out what that problem is costing your potential client.

Suppose someone reaches out to you for a project, but they find you too expensive. Don’t fall into the trap of explaining your rates!

Instead, get your client to tell you how solving their problem helps them and how much it’s costing them to leave it unsolved.

If a solution doesn’t help much and the problem costs them little, suggest they should find someone who also charges little and end the engagement.

Does the problem being gone mean the world to them? Then you have the room to charge a premium because they clearly value the impact of your services.

This is why lawyers generally get to charge high rates and most artists get stuck with low rates: one makes big problems go away, the other doesn’t fix anything.

So before you can set a price you need to understand your client’s problems and goals. 

Once you understand your client’s goals, you can frame your services as an investment rather than an expense. After all, your work will propel your client to his or her objective, which means hiring you has a clear and tangible benefit.

Are you losing (potential) clients to cheap competitors? Then you’re either not good enough, or you’re doing a poor job of communicating your value.

By Jeroen Elsing
Ex-lawyer turned relationship coach