Posts Tagged ‘selling services’

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It's your responsibility to establish the value of the service you provide.

Today I’ve got some suggestions for you on how to set prices for your training.

I’ve recently been receiving regular reflexology treatment. At my last session the reflexologist told me she’d been invited to submit a proposal to provide training at a dance school. “I have no idea how to structure the proposal, or even what to charge”   she told me. “They’ve asked me to run 12 two hour sessions”

“How many people will be receiving the training?” I asked. “10″     she replied. “And overall they’ll be getting 24 hours of training. What would it cost if they individually went and bought 24 hours of reflexology training on the open market?” “At least 600 euro per person”, she replied.

“Great. Well 10 times 600 euro is 6,000. So immediately we’ve established the value of this training at 6,000 euro”.

Her eyes widened, “That’s 3 times what I was thinking of charging.”

“Well I’m not saying you should charge that, but I would definitely include that piece of information somewhere in your proposal. You see, perception of value is a very subjective thing. If the decision makers have an idea that your time is worth 40 euro an hour, and they see you providing 24 hours of training, then the figure they may have in THEIR heads is 960.

On that basis, it will be difficult to persuade them to part with 2,000. You’re going to encounter price resistance and have a lot of objections to overcome. Even if you can convince them to pay 2,000, they’re going to have a feeling that they were overcharged. Even though their expectations were unrealistic and didn’t take into account your preparation time. It will be an uphill struggle.

In contrast, if you take the time to establish that this training would cost them 6,000 if they were to source it elsewhere, you could charge 3,000 and they will still feel like they’re getting value.

It’s your responsibility to establish the value of the service you provide. Before this conversation, my reflexologist was going to set her prices by calculating how many hours were involved, and then multiplying that by her hourly rate.

Yet her hourly rate as a reflexology practitioner is IRRELEVANT to the proposal she had been asked to submit. She is providing training to 10 people NOT a reflexology treatment to one. It’s a completely different service, with a completely different end value and should be priced accordingly. Same applies if you are a coach, consultant or providing any form of one-to-one service.

If a customer has a certain figure in their head, even if that figure is unrealistic, it’s YOUR job to educate them.

You don’t want clients agreeing to your fees, but feeling that they were overcharged. And they will if there is a big gap between their expectation and your fee.

So well before you reveal your fee, make sure you have reset their expectations and demonstrated convincingly what your solution would cost were they to source it elsewhere. Please note, you need to do this BEFORE you reveal your fee. If you wait until afterwards you will simply come across as defensive and trying to justify your fees. It’s not a pretty picture.

Making the effort to establish value and educate your clients up front can pay off in many ways.

You can eliminate price objections before they come up, and notice that in this case the reflexologist could submit a proposal that was 50% higher than she had planned AND it was able to present her price in such a way that the client knew they were getting good value. That’s a real win-win. Had she NOT taken the time to establish the value up front; she could have had a real struggle convincing the client to part with her original figure of 2,000.

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There's a logical sequence to building a business, whether it's online or offline. There are certain things that must be done in order to see your business grow. By committing to follow these eight steps, you can attract more clients and have the kind of income you want.

Step One: Get Clear On Who You're Targeting

Before you begin any marketing, you must find your target audience. Do your research and discover who your products or services can help the most. Without a clear understanding of exactly who you're targeting, your marketing can't be effective.

Specializing your approach will definitely help your conversion rate. It may make you nervous to think of narrowing your options, but it's the first step in attracting more long-term clients. Here's one more benefit to narrowing down your focus: each time you specialize a little more, you're able to charge more for your services.

Step Two: Understand What They Really Want Emotionally and Logically

Once you've identified your best target audience, it's time to learn what they really, really want. What do they dream of accomplishing? What keeps them awake at night?

There's no point in marketing your products if you aren't sure what your target market wants. Here's a key concept: people buy what they want, not what you think they need. Get to know your market and you'll find making sales much easier.

Step Three: Package What You're Offering Toward Desired End Results

Because you understand your market so well, you know the desired end result they'd like to achieve. The closer you get to that desired end result, the better you'll do in business. Package your products toward that result, so that you're always meeting the needs of your clients.

When you're really tuned into the needs of your target market, you'll experience the rush of business running smoothly. You'll stop having to push and shove to make sales and see how it all flows together €”the needs of a group of people, and products packaged to meet those needs. What's the takeaway? People don't buy because they understand something, they buy because they feel understood.

Step Four: Create an Irresistible Offer
What, exactly, are you delivering with your products, and what must the client give in return? To be effective in marketing, you need to be able to answer that question in one sentence. Here's an example: "Give me ten minutes per day and I'll give you the body you've always wanted."

You want to state your offer in a compelling way that has people raising their hands to say "I want that!" Work on developing your one-sentence offer; it will form the basis of all your other marketing.

Step Five: Go Find Your Target Audience
Where do the people most likely to buy your products hang out? Do they congregate on online discussion forums? What publications do they read? Which organizations do they join?

If you've done good market research in the previous steps, you'll already know the answers. Now, go out there and make your irresistible offer to them in ads, talks, comments on forums and whatever way you can that makes them affordably reachable.

Step Six: Practice Great Follow-up
You've done your research, created great products, packaged them to meet the needs of your target audience, and made your offer where they congregate. To maximize all the hard work you've already done, you must follow-up consistently.

What's the best way to make sure that happens? By automating and systematizing as much of your follow-up as possible. Here's the rule: Always follow up, and find ways to make it automatic.

Step Seven: Close the Sale
This one gets stepped around so often, and that's a shame, because it's essential if you want to succeed. Learn how to ask for their business. For some companies, that might mean a face-to-face meeting, and for many others, the entire sales process can be automated. Unless money changes hands, you're not really in business.

Whichever way you chose to close, you must give your prospects enough information that they can buy with confidence. Automate that information-sharing as much as you can, with webpages, sales letters and brochures, so that you can expand your impact in less time.

Step Eight: Make Additional Offers
The bulk of your profits are going to be made from additional sales to satisfied customers. You've already built a relationship with them and they know you can be trusted. Create products you can offer them as you continue to listen and hear what solutions they need.

These long-term clients give your business stability, and you're not out chasing new clients constantly. Learning to make additional offers will make the difference in whether your business lasts.

Following the eight steps puts you on the path to attracting new clients and earning more income. Keep working through them until you've perfected your products and your offer. Automate as many of your processes as you can, and don't forget to offer additional products to satisfied customers. By doing so, you'll be on the road to the income you want.

Bernadette Doyle is a small business marketing expert. Get more tips and advice at http://www.clientmagnets.com

Do you want to change your business model?

Do you want to go from trading time for money to creating an information empire?

If you're serious about it, you will need to look at every aspect of your business to find the areas where you can make changes that will grow your business.

As always, I remind you that you might not immediately see how something applies to your business. Keep an open mind.   You never know where an idea might apply later on.

Maybe the following example will inspire you to make changes in your own business.

Imagine you are a management development consultant selling your time to businesses. Last year you had 80 billable days at £1,000 a day. So altogether you earned £80,000 of revenue.

The remaining 200 working days were spent identifying potential clients, selling to clients, writing proposals and following up.

The only way you can see to generate more income is to sell more billable days - because you're caught in this trading time for money model.

You're thinking, "How do I sell and land clients more effectively? How do I reduce the sales cycle? How do I convert interest into paying business?"

As long as you're caught in this old manual labor way of thinking, you are trapped in the idea that you can only generate income by trading time for money.

What if there's another way?

In reality, companies aren't hiring you because they want to buy time from you. They hire you for what you can do for them. They recognize you as a problem solver with expertise that helps them to achieve their goals.

So, how do you switch your business model to an information empire?   You need to restructure you business offering so you can deliver more value to more people - while working less.

Identify the essence of what clients really want.

Sometimes we just put ourselves in a box and give ourselves a label - sales trainer, therapist, coach. We define ourselves by the activity that we do or the one way that we deliver service to clients.

But you are a lot more than that label.

When you're working with a client, you bring more than just one methodology to the table. Coaching is one of the tools in your toolbox. Training may be another. But they are both just ways that you help people achieve the end result. After all, a plumber doesn't describe himself as a wrench.

Look at what you are bringing to the table. Identify that quality that draws clients to you.

Find a way to package the solution.

Turn what you normally deliver in person into a standalone kit that can be sold off the shelf. For example, you might record a training session and sell that as a product.

Will someone who buys that have the same experience as being in a room with you? No. But they will still get a good portion of the information. And many people prefer this to attending events or workshops.

Create two variations of the new product.

There is a very good reason for this. Imagine a basic version that will cost buyers £249, and a deluxe version that sells for £349. A percentage of buyers will automatically upgrade to the deluxe version. These premium buyers want more and are willing to pay more. Give them the opportunity to spend more, and they will gladly take it.

Devise a plan for using existing resources and opportunities to develop products quickly.

You can't spend months or even weeks creating products. You haven't got that kind of time. Use what you have efficiently and effectively to develop the products you want to market.

Spend the bulk of your time promoting and marketing the products, identifying additional needs of your clients and customers, and creating more products to meet those needs.

Find the shortcuts to market your products.

You don't have to have to write proposals for every single sale you make.

Use direct response marketing, the Internet or maybe direct mail or e-mail. The market you are selling to will determine which venue is best. But the point is that you can sell products automatically.

Launch the products.

Let's say that you average two orders a day and 35% of the customers take the upgrade (which is a fairly typical percentage). Over the course of 12 months you will sell 325 of the basic version and 175 of the deluxe version. That will bring in £142,000 in income.

Remember that you were originally making £80,000. So you will have already doubled your revenue by switching to this model.

Switching to an information empire really will dramatically increase your income. Keeping an open mind while, examining your entire business will reveal opportunities for changes that will double or even triple your revenue.

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