How many freebies have you given away since starting your business? It’s okay to admit to it. Plenty of new service based small business owners have made this mistake. Even product based companies do it. It’s a syndrome of I want people to really like me and for them to like me I must discount my services or give it to them for free.
Let’s debunk this myth right here and right now. People pay for what they value and want daily. Your business is no exception to this rule. You must stand a firm ground from the beginning.
The Newbie Start
Yes, if you have no testimonials as a service business it okay to give away three of your services in exchange for testimonials and more. First, be very selective of the people who you are going to give this to. Make sure they are not vampire suckers who are negative Nancy’s who want the world for free. Find people who will appreciate your generosity. Maybe a local non-profit or stay at home mom trying to get her start.
Nip Friends & Family In The Bud
Before they even start with “I remember when I changed your diapers and you want to charge me for the service” or the “are you serious, you’re really going to make me pay for that necklace”. Tell them yes. They really need to support fiscally not just by forwarding and emailing about your business or telling their friends to follow your company on twitter. If you are going to do friends and family a favor state the rules and guidelines behind this. Don’t let it get over 10% off of a discount. You want to be paid what you deserve.
Know Your Worth
Value and worth are two different things people confuse on a daily basis. If you charge $325 per consultation session than make sure you are giving every client their moneys worth. Many people get stuck on the price when considering service businesses to hire. They will haggle you or possibly do more than that. However, if you know your worth is $325 but you give the discount to bring it down to $175 are you really worth what you quoted.
It is okay to discount services or products here and there. Remember this, Chanel has a sale twice a year. That’s it! Louis Vuitton is never on sale. They know the worth and value of their products. They give their customer a lifestyle they desire. Said customers know that the new Keepall duffle is worth every last penny. Many stores offer friends and family discounts at 30% off maybe twice a year. Don’t be that store or service company that is always on sale.
Learn How To Say No
Not every client is your client, nor is every customer your idle customer. It goes all the way back to knowing the worth of your business. People who want to tell me that my consulting is too much are not my idle clients and I will not argue with them. Simply say, no I cannot discount that or offer you a special at this time and mean it. If one person can walk over you so will the others.
Re-evaluate Your Pricing
Every six months to a year, its very important to know where your business is at. If everyone is jumping to work with you it might have to deal with your pricing. Yes, you do great work but sometimes you are just the cheapest business on the block. ICB Consulting prices started at $65 an hour, then went to $125 and are currently at $185. In January they are going up. Because the level of service I provide has risen.
You cannot live on pennies on the dollar. That is not providing you a living to build wealth and change lives. Sit down and write down a game plan to ensure that you are making your worth and increasing your company worth as well.