Your Customers Tell Lies: Part 1
Toolbox Tip: People tell lies (Part 1)
I’ve been writing about a price lately, and I’ve been seeing a lot of noise out there on the web. People talk about price and the pressure you get from your customers to be cheaper. And I want to talk about this, particularly to make this point that, “People tell lies”.
I’m Jon. I’m from Small Fish Business Coaching and I help people grow and scale their businesses and that is mostly about making more money. But it’s also about how you can use the extra money you made, not just to a greedy bastard, BUT:
- To reduce your stress
- To make everybody in the business more secure
- To provide the better service
- Make your business a better thing
It’s about the money but it’s not just about the money.
In a very large part, it’s about making sure you charge enough. If you bow to the pressure of people asking you to discount and perhaps lying, you run the risk of not charging enough, and not making enough money, and having a dysfunctional business and ending up like some of those sorry tales we see on the news of large businesses collapsing.
Recommended Reading:A discount for cash: Should you be doing it?
So today’s point: you need to charge enough.
Your customers want you to charge less. Nobody really knows what the right price is, which makes it quite a tense, anxiety-ridden situation. They don’t know what’s right. You don’t really know what’s right. They say you are too expensive but you don’t really know whether you are or not. It’s a bit tense. Everybody’s a little bit tense.
Your customers tell lies:
- “The dog ate my homework.”
- “I’ll transfer it now honestly.”
- “The other guy is cheaper than you.”
That’s what I want to explore. There is a lot of distrust around when it comes to price negotiations, particularly with trades business, partly because of:
- Lack of knowledge about what the right price is
- We’re not culturally ingrained to not trust each other in these situations
There’s a lot of news out there about bad trades and there’s a bit of distrust generally so that breeds:
- Not feeling like you need to be honest.
- Your customer feeling like it’s okay for an otherwise honest person to tell a bit of a fib in a price negotiation.
So when they say, “The other guy is cheaper than you…” and they imply it for exactly the same job, and they imply that he’s every bit as good as you are, or as your company is in every way, and that you really need to match his price guarantee, it’s a lie.
If it wasn’t a lie, he would have bought the thing from him and you wouldn’t be hearing from him until now. So guarantee the fact that he’s talking to you means either it’s not quite true and he prefers you for the job, and the other guy is deficient in some way. Or there is no other guy and it is just bullsh**t and it’s his negotiating strategy because he’s clever in negotiating.
So understand this, people tell lies and you don’t necessarily need to accept what they say at face value. Remember, part of my job is to push you to charge more and still get the business and part of that is resisting this discounting. And that’s what I do.
Here’s how I propose you do it.
- Do more marketing so you could afford to lose some because if you refuse to do the discount, some people will get the sh**t and you lose the job. I can’t promise this is a win every time. Do enough marketing so that you can be confident and stand firm and say “No, I’m not going to discount”.
- Set your price right and fair as best as you can.
- Don’t try and rip people off.
- Don’t leave room in there for discounting.
- Don’t guess.
- Figure out what’s fair.
- Do your homework on that.
- Set your price fair.
- Be prepared to defend it and to explain what they get for that price and cost to your things.
- Stand firm and refuse to discount. If someone says, “I need you to discount” say, “No, my price is fair. Go to the cheaper guy if he’s good as we are”. Or expect them to choose between the not so good but cheaper, or better but more expensive. (Just like we do, in almost everything in life.)
That’s my advice and I guarantee if you maintain some focus on your margins, and maintaining them enough to sustain your business, you’ll have a happier and more successful business.
And if you want to talk to me about coaching, book a 10-minute chat with me and we’ll be in touch.
See you later.
There are four ways you can engage with me:
1. Subscribe to these emails and get them once a week in your inbox so you never miss a video from me.
2. Join the Trades Business Toolshed Facebook Group where you can watch these videos, ask me questions or talk to your peers.
3. Attend my next Tools Down workshop.
4. Book yourself a 10-minute chat with me. We’ll talk about whether coaching is right for you now and if it is, we’ll go further into the process before you have to make your mind up.
See you later.