16 Nov Dont Be the Cheap Option
A thought occurred to me today as I reflected on my entrepreneurial journey. The reason some of us cannot move forward in our business structure is because we have become comfortable being the cheap option. Don’t get me wrong, sometimes this may be necessary to get some clout behind your name and some testimonials. But that should be transactional. Meaning it should not be offered to everyone.
Let me break that down by telling you a story from my challenging days of business.
During the pandemic, I was approached a few times to livestream funeral services. I was not someone that wanted to be at funerals and thought it was weird to live stream such a personal event. To be honest, I felt like it was morbid. However, the first funeral I agreed to do was as a favor to a client. As I prepared for any other live streaming event, I created graphics and links for the family and marched on. Keep in mind I did not want to do this in the first place. So I charged the family $75. This included me setting up during the viewing, the actual event and the custom graphics. I never thought I would do another funeral again. But this is the pandemic we are talking about. This was almost at the peak when many people were dying. I kept getting approached to live stream funerals. So, I had to really decide if this was going to be a thing in my business. Initially, I said no, but here’s what changed my initial thoughts. I spoke directly to families that said this service would be such a blessing for them because COVID-19 would not permit many of their family members to travel. I thought to myself, “A blessing, really?” A light bulb went off in my head. “OMG, I am helping families in their time of need, how can I be so selfish?”
In my career as a marketer, one rule of thumb is to listen to your customer. They will always tell you what they need. You just have to be willing to listen. So back to the story, after I decided to add this service to my business, I still had an internal struggle. I did not personally feel right charging people a large price while they are mourning and planning a funeral. I felt like I was taking advantage of them. So guess what I did? That’s right, I continued to charge $75. That one decision set off a series of events.
Of course, I was starting to get booked up almost every weekend. So one particular funeral, I was double booked by accident. I called one of my videographers to fill in. I was still only charging $75. But I had to pay the videographer around $140 for the job. I was like, hold the f up! I’m losing money. Something has to change.
So I went up slightly on the rate to $125. Still was getting booked up. Even formed some partnerships with a few funeral homes. Things were going ok, as long as I was doing the shooting myself. I kept thinking, I know I’m not charging enough. Plus there was extra preparation that had to be completed for some funerals. I should’ve been charging for that.
So I went up on my rates again to $250, but now I have streamlined options at this point. Some people are still continuing to book without batting an eye, while some are hesitating. That hesitation is what I was looking for. There’s only one me, which means time for a service has to be a balance between scarcity and value. Meaning, it has to be valuable to both me and the customer and my price should create a level of exclusion that says not everyone can afford to book me. I have a superior service than you doing it yourself.
Once the need was established and the word of mouth started getting around, I had more leverage and motivation not to be the cheap option. When you are selecting your price point, you are also selecting a type of customer that comes with that price point. For most talentpreneurs, after they get a few reps in, it’s time to reevaluate the rates.
Being the cheap option may be tempting to get customers, but make you’re ready for what all comes with that. One reason that stands out more for me than others, is customer service. I want to be able to provide accommodating service to all my clients. However, when I’m offering a sale or something least expensive, I get clients who don’t really know what they want, they want you to be a mind reader, very demanding and usually wants extra services that they did not pay for.
See when people don’t have to think about the dollar amount it takes to work with you, you attract clients those types of clients and if you don’t bend over backwards for them, they will be leaving a review to say as such. But see when they have to think about the investment it takes to work with you. Your clients will tend to be more intentional about what they want from you because they had to think it through. These types of clients usually don’t play around and values what can bring to the table more than the discount you gave them.