Why Premium Pricing is Key for Service Businesses | Dr. Francis Jezek
Summary
TLDRThe video script advises against following traditional marketing and sales advice for service businesses aiming for the premium market. It emphasizes avoiding the trap of low pricing and instead suggests raising prices while providing more value to clients. The speaker shares personal experience, warning against taking on clients seeking the cheapest option, as it often leads to dissatisfaction. The focus should be on premium services that differentiate from the competition and provide genuine value to clients, even if it means higher prices.
Takeaways
- 💼 Avoid conventional marketing and sales advice tailored for commoditized products or services.
- 🏆 Aim for the premium market where services and products are differentiated by more than just price.
- 💰 Contrary to common belief, do not lower your prices to attract more clients; instead, increase value to justify higher prices.
- 🔍 Spend more time understanding how to provide more value to clients, which will lead to their satisfaction and willingness to pay for quality.
- ❌ Be cautious of clients seeking the cheapest solution; they may not be the best fit for your premium service offerings.
- 🚫 Learn from past experiences and avoid taking on clients who have a history of dissatisfaction with premium services.
- 📈 Focus on marketing techniques suitable for premium products or services to differentiate yourself from the competition.
- 💡 Recognize that clients who are price-sensitive may not value the additional services you provide at a higher price point.
- 💎 Understand that a high price ticket does not necessarily mean a commoditized product; it signifies a premium service.
- 📊 Provide a premium service that is valuable to clients, even if it means simplifying solutions for those overwhelmed with stress and responsibilities.
- 🔑 The key is to avoid undesirable clients and selectively take on those who appreciate and value your premium offerings.
Q & A
Why should service businesses avoid traditional marketing and sales advice?
-Traditional marketing and sales advice is often tailored for commoditized products or services where the only differentiator is price. Service businesses aiming for the premium market should not follow this advice as it can lead to undervaluing their unique offerings.
What is the trap that service providers might fall into when they follow the advice of lowering prices to attract more clients?
-Lowering prices can lead service providers into a trap where they commoditize their services, potentially resenting their work and undervaluing the unique value they provide to clients.
What strategy is suggested instead of lowering prices to attract more clients?
-The opposite strategy is suggested: raise prices and provide more value to clients. This can lead to higher client satisfaction and a more premium market positioning.
How can service providers find ways to provide more value to their clients?
-By spending more time understanding their clients' needs, service providers can discover how to enhance the value of their services, leading to happier clients who see the worth in their investment.
What should a service provider do when a client insists on the cheapest solution?
-The service provider should either decline the client or warn them that the cheapest solution may not be in their best interest, based on their experience and the value of premium services.
Why is it not advisable to take on clients who are only interested in the cheapest solution?
-Clients seeking the cheapest solution may have unrealistic expectations and could become dissatisfied if they do not receive additional services they believe are standard at lower price points.
What is the difference between marketing techniques for commoditized products and premium products?
-Marketing techniques for commoditized products focus on price competition, while premium product marketing emphasizes unique value, quality, and the benefits of a higher price point.
How can service providers differentiate themselves from the masses and avoid commoditization?
-By focusing on premium pricing and delivering premium services, service providers can differentiate themselves, avoid being seen as low-priced, and not become commoditized.
What is the typical price range considered for high-priced ticket items in the premium market?
-The high-priced ticket items in the premium market typically start from $500 to $1,100, indicating a significant investment in quality and service.
How can service providers ensure that their premium pricing is justified to clients?
-Service providers must ensure that they provide a premium service that is valuable to clients, addressing their needs and offering solutions that make their lives easier and more stress-free.
What is the importance of avoiding clients that do not align with your service business's values?
-Avoiding misaligned clients helps service providers maintain their premium market positioning, ensures client satisfaction, and allows for a more selective and rewarding client base.
Outlines
💼 Avoiding the Pitfalls of Commoditization in Service Business
This paragraph emphasizes the importance of not following traditional marketing and sales advice for service businesses aiming for the premium market. The speaker warns against the common misconception that lower prices lead to more clients, which can be a trap for service providers. Instead, the advice is to increase prices and provide more value to clients, which can be achieved by spending more time understanding their needs. The speaker also shares personal experiences with clients seeking the cheapest solution and the negative outcomes that followed, suggesting that it's better to avoid such clients altogether. The focus should be on premium pricing and service to differentiate from the competition and to ensure that clients perceive the value they are receiving, even if the price is higher than the market average.
Mindmap
Keywords
💡Service Business
💡Marketing and Sales Advice
💡Commoditized Products/Services
💡Premium Market
💡Price Point
💡Value
💡Client Satisfaction
💡Commodity Market
💡Differentiation
💡High-Price Ticket
💡Client Selection
Highlights
Avoid conventional marketing and sales advice for service businesses aiming for the premium market.
Classical marketing strategies are designed for commoditized products and services, not for premium ones.
In the premium market, differentiation is key, not price competition.
Lowering prices can be a trap for service providers, leading to dissatisfaction.
Instead of lowering prices, businesses should raise prices and provide more value.
Investing more time can help find ways to deliver more value to clients.
Happy clients are more likely when they perceive their investment in a service as worthwhile.
Be cautious of clients seeking the cheapest solution; it may not align with premium service goals.
Experience suggests avoiding clients who only want the cheapest option can prevent negative outcomes.
Clients may not understand what they need, leading to dissatisfaction even with the right product.
Providing extra services can be expected by clients, even at a higher price point.
Avoid commoditization by focusing on premium pricing and service delivery.
When examining marketing techniques, differentiate between those for commoditized and premium products.
Seek insights and techniques for premium products to stand out in the market.
A high price ticket does not guarantee a premium service; ensure the service justifies the cost.
Some clients may be willing to pay less, misunderstanding the value of a premium service.
Happy clients appreciate simplicity and relief from stress, even at a higher price.
The goal is to avoid unwanted clients and focus on those who value premium service.
Transcripts
do you have a service business and want
to gain more more clients and more money
well don't listen to the marketing and
sales guys at least not to all of them
why well the classical marketing and
sales advice is actually made for the
product merchandise commoditized
products or services that means that all
the services and products are actually
the same and the only difference between
them is the price point you want to be
in the premium Market Market where not
every product and every service is the
same so don't listen to them because
they will tell you that the lower the
price the more money or the more clients
you will have that of course if you're a
service provider is a trap it's a big
trap that you will fall into and will
resent your life what you should do is
actually the opposite you should higher
the price and provide more value well
how do you provide more value well if
you spend more time on it you will
probably find out a way how you can
provide more value to the client and the
client will then obviously be happy that
he invested his money for that service
you actually wanted there will be times
when the client will say he wants the
cheapest solution either don't take the
client or warn them that this will not
be the best interest in their heart but
from my experience I never take these
clients any again why I have really
really bad experience like I said either
they don't want what they want to buy
and they are mad at you because you
didn't persuade them otherwise or they
actually don't know what they're doing
and they want this product and at the
end when you got to provide this product
or service they will be mad at you
because you didn't provide the extra
Services because therefore this is so
common that everybody's doing and no at
this price point I cannot but they
thinking yeah I I bought the best
product in my life I even gain a perfect
price so don't go into that that Market
Market Point use premium price and
deliver premium Services when you look
at marketing and sales techniques always
look at it whether it's a for a commod
dized or low priced item for a product
service or is it for a premium product
service because mostly you should look
for the insights and techniques and
methods for the premium products because
then you will diverse ify yourself from
the masses you will not become
commoditized low priced and you will
also not be seen as low priced by the
client even if you're selling I don't
know $10 instead of
$1 item it's still not going to be
commod IED you know but usually the high
price ticket starts with $500 to $11,000
but you should also provide enough
premium service so it will be valuable
to the clients as such I've seen clients
that are of course willing to pay really
low money because they think this low
solution will benefit them because they
will so save money but I've also seen
clients that were really really happy
with a simple solution and if you add an
extra for high high price ticket they
would really be grateful that you took
something off their plate because they
just had so much on their plate of diam
and stress that if you you know EAS dep
their life they're going to be really
happy so it's a matter of avoiding
clients you don't want to have and you
taking only clients that you want to
have but that's a different story
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