The Entrepreneurial Bubble - Success Under Duress
Image via WikipediaWhy aren’t we as entrepreneurs, small business owners and professionals talking about the Entrepreneurial Bubble?
Most of us are almost paying our bills - and in this economy break even is a good thing. Our entrepreneurial sector is NOT FAILING. It is just that our rate bubble has popped.
The mode of getting a referral, doing the job, getting the check, creating a happy customer and repeating the drill has changed to: Where have all the customers gone?
Doesn’t it make perfect sense to adjust our rates like the housing market?
And to recognize that we are each others customers OR WERE until we couldn’t afford each other anymore?
My own resistance to lowering prices is due to feeling like I’m worth what I charge - that I’ve already given up too much, that it has already been too tough, and that I’ve spent years learning how to do great work.
And yes, these are great arguments. But they lack perspective, context, sensitivity and an understanding of what the market will bear.
And one more crazy thing - many of us are strategically giving away our services to align with others - so we are left with two ends of the spectrum - FREE and FULL PRICE. Free as the investment, full price to our consumers. BUT lowered - rarely because it hurts too much.
Yet, the simple adjustment to make ourselves affordable to each other is ONE SIMPLE SOLUTION that will spark more work, which will spark more revenue.
Not that it’s the only solution. But it is a single brick in a new foundation and with enough bricks we can rebuild something strong and deep enough to support a second story.
The bottom has always been the new top!
And we need a new story.
What is yours?
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Great topic Lennie. Price adjusting is a slippery slope, one I pass on. Once you start playing with your price, well, it tough to go back, women entrepreneurs particularly. This begs the question: Who’s our ideal client? Price shopper? Or the client who recognizes and values our expertise, what we provide, and how it’s delivered. If the client or prospect is all about price, is that really the kind of client you want to work with?
Watch this excellent video: http://www.vendorclientvideo.com
Two stories for you:
First, a friend is a writer and communications specialist, with her own business. Has successfully worked with corporate clients and is currently also working with independent and small business owners and entrepreneurs. Does she charge her these new clients her corporate fee? No. Does she take every person who contacts her for her services? No.
Second, a client approached me about working with her privately, in her home, at her preferred time but at a 50% reduced rate, which was the rate for a personal trainer at her local gym. I passed. Then she asked about working with me at that gym, at her preferred time, so she could get a cheaper rate. I passed. With each pass, I offered her alternate value options, without compromising my price. She passed and sought a trainer at her gym, hasn’t found one yet. It became clear during our conversations that the woman was not my ideal client. It would be interesting to know if she reduces her rates 50% in her private psychology practice when clients ask. hmmm. Two weeks after this failed negotiation, a new client contacted me. Full price and it’s going beautifully.
What the consumer fails to understand, the cost of doing business hasn’t gone down. It’s up to us to weed out the serious, ideal clients from those just fixated on price.
In my practice, I’m launching a commission based referral initiative and considering bringing in sales staff, ideal those interested in starting their own business. nstead of always throwing away FREE service and time, if it’s cash the peeps are seeking, give ‘em some cash.
Thanks, Shannon!
You make a good point and particularly for those who are merely shopping on price. I also agree, it is very sweet to work with pre-recession rates and with some one who doesn’t haggle and thinks you’re worth it.
You just keep up the good work, sister and let us know how you’re growing!
LR