Hello, this is Dave at AFX. This video is dedicated to our colleagues in the investigative or title abstracting industries. One of the recurring questions that often arises is the strategy of gaining market share through price decreases. In this discussion, we’ll delve into the intricacies of this approach and explore alternative strategies that might better serve your business goals.
The Intention Behind Price Decreases: Business Development or a Risky Move?
Before contemplating a price decrease, it’s crucial to clarify the intention behind this decision. If the goal is business development, intending to build up your client base, then a word of caution is in order. Decreasing prices may seem like a step towards attracting more clients, but it’s essentially a move closer to diminishing your business.
Considerations Before Lowering Prices:
- Impact on Business Viability: Lowering your price might make it more appealing to potential clients, but it could compromise the viability of your business in the long run.
- Client’s Best Interest: If you’re cutting costs and revenue, it’s essential to assess where these cuts will come from. Taking away resources that could be utilized for client services, investigations, or research might not align with your client’s best interest.
- Fair Pricing and Client Relations: Fair and reasonable pricing ensures a good return on investment for your client. Decreasing prices may inadvertently take away valuable services that your clients didn’t bargain for, affecting the quality of your offerings.
The Alternative: Building Customer Relations
Rather than resorting to price decreases, consider alternative strategies focused on building strong customer relations. This involves a customer retention strategy, customer acquisition strategy, or a robust customer relations management strategy.
Advantages of Customer-Centric Approaches:
- Client Experience: Clients often seek great customer service and a positive experience. Offering more in terms of service, expertise, and support can be a more effective strategy.
- Long-Term Profitability: A slight increase in price, justified by superior service or qualifications, can lead to long-term profitability. Clients willing to pay a fair price for exceptional service are the ones you want to retain.
- Employee Satisfaction: A more robust business environment, made possible by fair pricing, can contribute to employee satisfaction. Happy employees can provide better service, creating a positive feedback loop.
Understanding the Math of Price Decreases:
It’s essential to realize that cutting prices only proves proficiency in subtraction, not necessarily in building a sustainable business. While it might be tempting to play the pricing game, the long-term rewards lie in offering superior service and expertise.
Handling Price Objections: Complaint vs. Objection
If a client suggests that your price is too high, don’t confuse it as an objection that will deter them from doing business. It might simply be a complaint, and clients often voice concerns about prices regardless. If your price is fair and justified by your expertise, clients will recognize and appreciate the value you bring to the table.
Strive for Fair Pricing and Exceptional Service
If you’re a highly skilled investigator or title abstractor, focus on setting a fair price that reflects your expertise. Accumulate clients who appreciate the quality of your work rather than engaging in a race to the bottom with price cuts. If you have further questions or want to discuss this in detail, feel free to call me at 784-853-371, extension 1.
Remember, your skills and expertise deserve fair compensation, and building lasting client relationships is far more rewarding than engaging in price wars.
Disclaimer: The insights shared in this blog post are based on general observations and may not apply to every business situation. Each professional should carefully assess their unique circumstances before making pricing decisions.