Home – New Forums Marketing mastery How to del with market perception of being too expensive?

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  • #969777
    Eca IT business systems
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    Im just wondering if anyone else there (in any industry) has come across the perception of being too costly (in time and money) as a hurdle to obtain clients and how they overcame the issue? I understand that the client has to see the value in the service. In our particular case i would have thought cutting down the work load of employees or potentially putting off staff would be seen as a good value & cost saving to any business? (our strength is in manufacturing industry)

    I understand that IT has a reputation for hand in the pocket; paying out for licenses, software; training their staff, dealing with bugs or new tasks that the software can’t handle. Then it seems like a waste of time & money for that particular business.

    If anyone can offer some wisdom on this, i’d appreciate it!

    #1040812
    SalesExpert
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    Eca IT business systems, post: 49281 wrote:
    Im just wondering if anyone else there (in any industry) has come across the perception of being too costly (in time and money) as a hurdle to obtain clients and how they overcame the issue? I understand that the client has to see the value in the service. In our particular case i would have thought cutting down the work load of employees or potentially putting off staff would be seen as a good value & cost saving to any business? (our strength is in manufacturing industry)

    I understand that IT has a reputation for hand in the pocket; paying out for licenses, software; training their staff, dealing with bugs or new tasks that the software can’t handle. Then it seems like a waste of time & money for that particular business.

    If anyone can offer some wisdom on this, i’d appreciate it!

    This is common for every market the MOST common objection is price and I havent found an organisation yet that cannot in some way define their value proposition. Typically this comes down to the buyers ROI or TCO value, so once you have established if you are providing your client a Return on Investment or a reduced Total Cost of Ownership you can establish the math for them – in some cases you will need to present both the TCO and ROI.

    Once you have these values in a proveable format you are home and hosed.

    #1040813
    travelmaster
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    Hi there,

    This a question that has been bothering me for ages. I am in the travel industry, a travel agency to be specific. To us it seems that everyone out there has all of a sudden become an expert in travel and can do everything on the net. In fact there is a recent study somewhere out there, which says, that most pple perceive travel agents to be more expensive than what you would pay for the same product on the net. This of course is true in some cases but not in every case. But the perception is everything and that is the dillema we are facing. So back to your question – we have actually created a new office, new look, new name, new branding, the lot from A to Z. All with a specific purpose in mind – to look different. At first we were worried that all of our clients will simply “walk”. But no so. we now look the part and consequently have no quarms about charging for what we do. Those who are looking for “the cheapest” will always find it somewhere else, and thise who want to deal with us and are happy to pay for it keep coming back to us.
    Not sure if that ansers the question but that’s how we have dealt with the “you are too expensive” perception.

    Rgds

    #1040814
    bridiej
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    They key is to sell your benefits: what can you offer the customer, how are you going to make their lives easier?

    You need to get them hooked before the price is mentioned.

    For example, if I received a call from a potential client who’s in real estate and they asked “how much do you charge?” rather than giving them the rates I would ask some questions about the type of business they have and the service they would be looking for and then sell the benefits first

    “Our real estate agents prefer our three day turnaround option, your audio will be typed, proofread and returned to you on or before the three days is up, with a 24hr turnaround option if you need something back urgently. The rates start at $2.15 per audio minute”.

    That is very basic and not exactly what I would say but just an idea – hopefully the customer will love the idea that his work is done so quickly that he barely gives the price a second thought.

    Anyway, hope that is some help.

    #1040815
    Jake@EmroyPrint
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    Hi Eca,

    Personally for me, it depends on how much MORE expensive you are.

    If you are wildy more expensive, then I would think that something was a bit odd, but if it’s just say 10-20% or so, I would still consider purchasing the more expensive option.

    What concerns me more than price is good service, knowledge of the industry and a reasonable deadline.

    – Jake

    #1040816
    Craig_H
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    Emroy, post: 49301 wrote:
    If you are wildy more expensive, then I would think that something was a bit odd, but if it’s just say 10-20% or so, I would still consider purchasing the more expensive option.

    – Jake

    I just wanted to elaberate on what Jake mentioned here. I would gladly pay a bit extra for good service as I find good, honest, helpful service so hard to come by these days. There is a limit though and if you are a lot more expensive you have to justify why. If you are offering a lot more then thats fine but if you aren’t then why the difference in price?

    I personally find if you project a professional image, can back that up with a professional service and explain yourself then you won’t have any problems.

    Have you heard about pricing to your market? It basicly means if you are very cheap you’ll get the clients that want it even cheaper or are bad payers, if you price a bit higher you get clients that respect what you do and know that it is worth paying for.

    #1040817
    yourvirtualboard
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    Some good comments already but remember your perception is your reality and if that’s what’s being perceived then they are not able to see the value of your offering.

    This could be a number of reasons from it is too expensive, which is really cost doesn’t match value delivered through to clients not clearly understanding what they are being offered which is an education issue.

    You mention “In our particular case i would have thought cutting down the work load of employees or potentially putting off staff would be seen as a good value & cost saving to any business? (our strength is in manufacturing industry)” something so clear to you may not be so clear to your prospects (education) – people / businesses will pay for things that save money, time or offer convenience and it just needs to be very clearly indicated which and how you would be doing that for them.

    Of course when you are in an industry that has many suppliers then the market generally dictates price based on the average being applied and then your offering has to be even more unique if you want to charge more.

    #1040818
    JohnSheppard
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    Eca IT business systems, post: 49281 wrote:
    I understand that IT has a reputation for hand in the pocket; paying out for licenses, software; training their staff, dealing with bugs or new tasks that the software can’t handle. Then it seems like a waste of time & money for that particular business.

    If you are doing custom software, might you consider that it IS actually a waste of money for many business? Custom software is expensive, Very expensive. and for most businesses off the shelf software provides a better choice.

    Do you have case studies that show proven ROI targeted directly to who you are selling to? IMO you will have a very hard time convincing anyone to outlay loads of cash without them. You can’t change people’s fundamental mindset without something like this clearly showing them how it has worked before and how it can work for them.

    #1040819
    mark_xpnsit
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    I would agree that the price you charge should be inline with your projected brand image – if you are showing your customers and potential customers why and how you justify a premium they will pay it – whether its better service, higher quality products or just that you are a guru in your field.

    Its the same in every industry. Just look at cars and what companies do to seperate themselves from others on price and luxury. The brand image for a holden is very different than for a Merc and for good reason

    #1040820
    Eca IT business systems
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    Emroy, post: 49301 wrote:
    Hi Eca,

    Personally for me, it depends on how much MORE expensive you are.

    If you are wildy more expensive, then I would think that something was a bit odd, but if it’s just say 10-20% or so, I would still consider purchasing the more expensive option.

    What concerns me more than price is good service, knowledge of the industry and a reasonable deadline.

    – Jake

    Hi jake. my question was in regards to the IT industry as a whole.

    I would be a cheaper than the bigger corporate software guys, who i could probably blame for people thinking that a custom software solution (no matter where you go or what you need done) would cost 20-50k.

    #1040821
    JohnSheppard
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    Eca IT business systems, post: 49501 wrote:
    Hi jake. my question was in regards to the IT industry as a whole.

    I would be a cheaper than the bigger corporate software guys, who i could probably blame for people thinking that a custom software solution (no matter where you go or what you need done) would cost 20-50k.

    I don’t think you can blame corporate software people….I think you are better off looking at reality for that :)

    A qualified lead software developer generally costs $80k to $120k+ per annum plus other expenses. Add marketing and sales expenses on top of that, and for 20-50k, you get about 4-10 weeks work.

    You can’t get much done in that time that would provide any ROI for anyone.

    If you think you can do it cheaper I think you’ll find you are doing your calculations wrong.

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