Selling consulting services at premium prices

Posted by Michael Cage on Monday, June 20, 2005

Recently, a friend and business associate paid $4,700 to an I.T. consultant and computer reseller. So what, you say? It's interesting because it was the highest bid he received for the solution, and the next closest bid, from a professional and capable company, was $3,500, over $1,000 less!

Why did my friend, Tom, choose the higher priced consultant over the cheaper one?

You might think the higher price included a superior technical solution. It didn't. The technical solutions were identical. You might think the lower priced companies had poor customer service, or didn't show up for an appointment on time. Nope, that's not the case either.

Three factors made the difference for Tom.

First, Tom runs a high-end medical office. The vendor he chose had specialized knowledge about his business, and proved it by telling Tom about the impact new hardware would have on the industry-specific software his office ran. The competition made Tom feel like he was "just another business," and that they didn't understand what made his office unique.
Second, the vendor didn't try to hide his high price. He told Tom, up front, that his bid would be more expensive than the competition. But he didn't stop there. He explained the reason why his solution was more expensive, and why it would actually cost Tom less money and frustration in the long run.
Third, the day before Tom met with the vendor for the first time, he received a Federal Express package. Inside, he discovered a large binder filled with photographs of the vendor with his smiling clients, and letters about the great job done. On the cover of the binder was a large Post-It note with the handwritten words, "Tom, I'm looking forward to adding you to this album." (BTW, this is one of my favorite marketing strategies for consultants and consulting firms --- it makes an enormous impact and, in many cases, can "sell" your solution well before you arrive for the appointment.)

What is the lesson here?

The real reason people buy "cheap" advisors and consultants

When clients choose a "cheapest-price" option, there is a temptation to label them as "cheap." Nine times out of ten, that conclusion is dead wrong.

Clients choose the cheapest price option because you haven't given them a compelling reason why it makes sense to pay more. With no other difference to measure options by, all that's left for the client to compare is price. When it comes to value, perception is reality. And when all solutions appear equal, why would they choose anything other than the cheapest option?

5 smart-marketing consultant questions

I want to leave you with five questions you can use to find compelling ways to make your business and solutions stand out to your customers:

What specialized knowledge does your business have that can add value to what you sell?
How can you present yourself as a specialist to your best and most profitable customers?
What can you package with your solutions to make the perceived value to be higher? A day of training, a newsletter, a special advisory service?
How can you guarantee your solution to prove you back up the higher value you present?
How can you prove you are worth higher prices? And do you have thrilled customers to prove it for you?

9 Comments & Trackbacks (add your own)

Premium Services for Premium Prices

Michael Cage writes: Clients choose the cheapest price option because you haven’t given them a compelling reason why it makes sense to pay more. With no other difference to measure options by, all that’s left for the client to…

life (over IP) on Monday, June 20, 2005

Bravo! It’s the consultant that realizes he/she is not bidding on price, but value. Leave the prosects that are shopping on price - they are the future headaches of your competition.

David Wells on Wednesday, June 29, 2005

The Carnival of the Capitalists for the week of July 11, 2005

Economics. Business. Marketing. Investing. Technology. Real Estate. That and more in the July 11, 2005 Carnival of the Capitalists, which sets up its tents at Multiple Mentality this week.
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Multiple Mentality | www.multiplementality.com on Monday, July 11, 2005

I would like to get more information about your services and prices.

Kind Regards,

Liesbeth

Liesbeth Beullens on Monday, November 27, 2006

Hola faretaste
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