Marketing Strategy Vs Being Overpriced

Do you have an effective marketing strategy or are you just expensive?

Like most service based companies your ideal client is probably a big company or individual with plenty of cash and a large need for your services. You may even have tried to entice this type of client by tailoring your marketing towards them.

This is understandable as big projects are often more interesting to work on and are usually more profitable. Some techniques I see people use to lure in these dream clients include:

  • Advertising high prices, in the hope it matches the expectations of a big budget client;
  • Make an offer only available for your ideal client, like “free HR Review for businesses with over 200 staff”;
  • Some agencies and firms just state outright that they only work with people that meet a set criteria.

However on it’s own this can make you look overpriced for what you offer which doesn’t appeal to anybody. Not just the lower value clients you were trying to avoid but it can also deter high value clients too.

People aren’t averse to high prices, but everybody likes to get a good deal, and nobody likes to feel they have been charged unfairly just because they can afford it.

Donald Trump wrote a book called the Art of The Deal. In the book he says how he always chases contractors that have overcharged him despite being a billionaire. Everybody wants to feel like they are getting a good deal. I think it was Mark Cuban the billionaire that said some restaurants recognise him and overcharge him so he doesn’t go back to those places again, despite having more money than he could probably spend in his lifetime. If billionaires don’t want to be charged an unfair price then it is probably safe to assume most other people aren’t that keen either.

Marketing Strategy

The alternative to this is to have a Marketing Strategy where you charge more but you offer a superior service to your target group. Your target group shouldn’t just be “people with more money”. There should be a genuine reason why your service is better for your target group and that is linked to what is unique about that group.

The best strategies are the ones where there is an obvious sacrifice. Like business class seats on an aeroplane where the seats cost more because each seat uses up more of the limited space on the plane. There is a clear conflict between the number of seats and how much space each seat has.

Just like the business class seats you may charge more but in exchange serve fewer clients so that you can offer a more attentive service to the client’s need. Dealing with less clients could mean a better quality service for each or just a lower risk of someone making an expensive blunder.

A sacrifice strategy like this should show that you are better at providing for one group and as a result you are worse at providing for others, as your whole service is targeted at serving the needs of that one group. This means your higher price is well justified for anyone in your ideal group and other groups may be better going elsewhere.

For example:

  • A gym that is expensive because they put a strict cap on the number of members they have, allowing busy people to get to the machines they need even during peak times.
  • A motoring lawyer that specialises in defending directors and senior staff who use their cars for business use. He would spend more time on each case before the Court date which obviously costs more. He would also have experience of defending this group of people that would often have similar mitigating reasons even if the offence is different, as they all need their car for business purposes.
  • An accountant that only does work for hotels, who commits regular time and effort understanding that particular industry. This means less time for billing but better industry expertise that make it worth paying a higher hourly rate for.

Caveats

It is important not to be too narrow with your strategy as only a percentage of your target market will enquire, and a smaller percentage of those will sign up. You still need a large number of enquiries so you can convert the best from the bunch.

Even with a great marketing strategy there will still be work involved in handling and converting enquiries. Some people continually hope for the elusive marketing channel that is so good that the person will practically be signed up as a client before you have even spoke to them, hoping to avoid the need for anything “salesy”.

A Detailed Example

Using myself (Measured Marketing) as a more detailed example, which is the business I know best of course! In ten years of Adwords I’ve never set up a Google Products campaign (they’re the ads where you see a picture of the product and a price). We specialise in campaigns for companies that offer a service and for companies that sell financial products. People who sell the invisible.

Here are things we have built up that would be useless for a products campaign but great for running Adwords for service based businesses:

  • A discount on sophisticated call tracking solutions, as we use lots of them. Service businesses usually get 75% of their enquiries via telephone. So these solutions allow us to accumulate a lot more data on what is leading to enquiries.
  • Call data from tracking thousands of client calls, this lets us know how likely people are to call up at different times of day
  • In house software that allows us to make changes across multiple campaigns. If we increase the bid for “employment solicitor Manchester” in the Manchester campaign is makes the same adjustment to the keyword “employment solicitor Liverpool” in the Liverpool campaign. Handy when some clients cover 30+ locations with almost identical campaigns.
  • Tried and tested copy formulas and copywriting techniques for promoting service based businesses, which is very different from copy to sell products.
  • In house software that allows us to quickly set up and scale landing pages for service campaigns, these landing pages are often very similar but targeted towards a slightly different keyword that means the same thing. People tend to use a wider range of keywords when researching services. We are able to set clients up with hundreds of pages through this system that uses layers of templates.

As well as having an actual sacrifice you need to make sure you communicate that with your potential clients through your marketing.

No Comments

Post a Comment