Low Priced Sales Are Killing your Business, And Burning You Out In The Process
I was looking back over how times have changed recently, and what became very apparent was the lust for discounted products, but what do these discounted products do to our credibility, our service and our business long term.
You may or may not have heard the term the long tale effect, a term that the giant Amazon is probably well known and regarded for.
Start by selling low-end products in volume and then scale up to more pricey products once trust has been built, and you will have seen many businesses operate this system. Companies like eBay, Groupon and LivingSocial and many many more, and while this particular style works incredibly well for these type of companies the question is, will this work as well for you?
Companies like Amazon and eBay have raised huge rounds of financial backing to support the time it takes to build trust and create a viable business model, for most though, they don’t have the luxury of big fat bank accounts with money raised from venture capitalists.
So if you’re going into a price war with a competitor or looking to build a long tail effect like Amazon, eBay and Groupon, can you financial support yourself on the low priced sales, and if you have the opportunity to make enough of these low priced sales to become financially comfortable, CAN YOU SUPPORT AND DELIVER THE QUALITY & SERVICE.
No matter what industry you operate in, you are bound by the laws of time, and while ever you’re exchanging your time for money, you will always be limited to the money you can earn.
For example, let’s say you charge £100 per hour and are fully booked with 40 clients each week, sure the £4000 a week paycheck sounds great, but how long can you operate at full capacity, working flat out for 40 hours a week.
YOU WILL BURN OUT, then you’re no good to anyone. Not to mention how you will ever scale your business. You will always earn the same.
Over 160 hours a month, managing over 160 clients, can you honestly give them the service you promised, can you even manage that many clients?
Low priced sales are killing your business, and burning you out in the process!
You need to be doing less of more, not more of less. Start selling higher-priced products, and really focus on delivering high-quality service, service that makes a difference.
CHARGE MORE! seriously, charge more.
It doesn’t matter what your competition is charging, they’re selling a product, you need to start selling a solution to problems. If you can make that problem go away, then people will happily pay you more. This gives you more time to spend with each client, and really focus on the quality you’re providing, producing better results, and making it even easier to win new business… with glowing recommendations.
So that £100 per hour has suddenly turned into a product that can solve your client’s problem, the new price tag is £4000. But the problem will be gone, also your 160hrs a month and 160 clients fighting for your attention each month will be gone. Instead, you’re working with just 4 clients, earning the same amount of money and working a little over 4 hours a month.
Can you scale your business, of cause you can, can you earn more money, of cause you can. In fact, if you want to earn 4 times what you previously earned, you will still only be dealing with 16 clients a month, and earning in excess of £64,000, as opposed to the £16,000 you were earning while working 40 hrs a week, 160hrs a month with 160 clients.
Less is more, and that’s the truth. Work less, sell less, but charge more.