Post-recession, everything's changed!
I was in the States last week, working on a deal I’ve been trying to land for years. More of that another time, but I also spent some flying hours reading the ever-brilliant Jeffrey Gitomer, an inspirational writer and guru of sales, marketing and networking.
I’ve always found his books and articles hugely entertaining and readable, but his latest newsletter really grabbed my attention.
I’ll paraphrase without plagiarising – for the real thing, visit www.gitomer.com
It’s all about how your customer has changed during, and maybe because of, the recession -
1 – He’s angry that his home and investments went down in value
2 – He won’t be banking, or buying homes, cars or insurance like he did before, and has lost all his respect for previously revered institutions
3 – He’s online, and blogging, Tweeting, Facebooking, Linkedining and YouTubing about his buying experiences. If your service sucks, all your other customers will soon know
4 – He’s Googling, not Yellow-Paging, and can do this anywhere, anytime on his mobile device
5 – He’ll buy immediately if you take credit cards online, including after midnight 365 days of the year
6 – By the time he buys, he will have checked your price and facts online in seconds, and read what customers, as well as you, have to say about your company
7 – Because of this, he knows as much about your products as you do, and more about your competitors’ products than you do
8 – He wants you to answer the phone, and is sick of your hold music, your automated options, your offshore so-called “help-desks” and you telling him how important he is while he pays 10p a minute holding on your 0870 customer “service” line
9 – He’s looking for ideas, answers, help and advice, not crummy, transparent special offers
10 – He expects you to be as computer-literate as he is, and will be utterly turned off if you reply to his online query from a Hotmail, msn, AOL, gmail or other proprietary address. Get your own domain name for £7.99pa to meet your customer’s minimum expectations!
As Gitomer wisely adds, we are not going to “recover” from this recession; we are going to “revive and revise”.
Is your business ready?
Jon Cooper is the founder of Jupiter Dawn Consulting. Add any comments or questions to this column online, or by e-mail to jon@jupiterdawn.com
Showing posts with label value. Show all posts
Showing posts with label value. Show all posts
Monday, 21 September 2009
Jon Cooper: Professional firms should forget about hourly rates
A fair price for a fair job!
I was personally reminded today of the perils of time-costing so beloved of solicitors, accountants and many consultants. I received an unfathomably large bill from a lawyer who did some property work about 3 months ago. I was aghast, but immediately grasped the problem.
He had billed me for what the job was worth to him – the supplier, not what it was worth to me – the customer!
I have approached his firm with a proposal to help him move from hourly billing to value pricing. The proposition that “time is money” is over 250 years old, and attributed to Benjamin Franklin. However, clocks don’t write cheques, and you don’t attract and retain clients by selling hours.
You sell solutions, service and value.
For the benefit of anyone currently charging clients by the hour, here’s why switching to value pricing could transform your business:
1: Pricing a job at outset gets any objections from clients on the table before you start; far better than arguing over the bill at the end!
2: Clients feel special, as you are calculating a bespoke value for their work. Hourly rates, by contrast, are applied at the same level for everyone, irrespective of the value you are adding to their business.
3: Sharing risk by quoting fixed prices projects experience and confidence in your delivery and performance. Clients will feel that you must know you can do the job, otherwise you wouldn’t have committed to it.
4: Clients will appreciate that you are not about to rip them off. Can you imagine how you would feel if an airline charged by the mile for your ticket? Maybe the pilot would deliberately take the long route to rack up the costs!
5: Value pricing forces internal efficiency. Fixing revenue ensures you will delegate and review work flows so you can offer service whilst ensuring you meet your own profitability aspirations.
6: Annual price increases are easier to factor in, as each job is costed individually. No firm likes sending out notices of hourly rate hikes, and no client likes receiving them.
In summary: value pricing encourages trust and nurtures long-term relationships with satisfied clients, leading to mutual profitability and success.
It’s time to ditch the clock and focus on value!
Jon Cooper is the founder of Jupiter Dawn Consulting. Add any comments or questions to this column online, or by e-mail to jon@jupiterdawn.com
I was personally reminded today of the perils of time-costing so beloved of solicitors, accountants and many consultants. I received an unfathomably large bill from a lawyer who did some property work about 3 months ago. I was aghast, but immediately grasped the problem.
He had billed me for what the job was worth to him – the supplier, not what it was worth to me – the customer!
I have approached his firm with a proposal to help him move from hourly billing to value pricing. The proposition that “time is money” is over 250 years old, and attributed to Benjamin Franklin. However, clocks don’t write cheques, and you don’t attract and retain clients by selling hours.
You sell solutions, service and value.
For the benefit of anyone currently charging clients by the hour, here’s why switching to value pricing could transform your business:
1: Pricing a job at outset gets any objections from clients on the table before you start; far better than arguing over the bill at the end!
2: Clients feel special, as you are calculating a bespoke value for their work. Hourly rates, by contrast, are applied at the same level for everyone, irrespective of the value you are adding to their business.
3: Sharing risk by quoting fixed prices projects experience and confidence in your delivery and performance. Clients will feel that you must know you can do the job, otherwise you wouldn’t have committed to it.
4: Clients will appreciate that you are not about to rip them off. Can you imagine how you would feel if an airline charged by the mile for your ticket? Maybe the pilot would deliberately take the long route to rack up the costs!
5: Value pricing forces internal efficiency. Fixing revenue ensures you will delegate and review work flows so you can offer service whilst ensuring you meet your own profitability aspirations.
6: Annual price increases are easier to factor in, as each job is costed individually. No firm likes sending out notices of hourly rate hikes, and no client likes receiving them.
In summary: value pricing encourages trust and nurtures long-term relationships with satisfied clients, leading to mutual profitability and success.
It’s time to ditch the clock and focus on value!
Jon Cooper is the founder of Jupiter Dawn Consulting. Add any comments or questions to this column online, or by e-mail to jon@jupiterdawn.com
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