I was recently visiting with an IT services provider, and we were talking about pricing, positioning, and client fit.
As he talked about identifying clients who are the best fit, he observed that one characteristic he’s looking for in a discovery meeting is whether that business owner is thinking about their business strategically.
It’s a terrific observation. A business owner who is so focused on the day to day that they can’t readily look at the big picture of their company and where they are going? They’re much more likely to be a price-sensitive client and one difficult to deal with.
In the IT services world, that’s a business owner who’s thinking more about their provider as a “break, fix” vendor when something goes wrong, instead of a vital resource in the long-term growth of their business.
The business owner who can think strategically and ask questions from that point of view is much more likely to be weighing a service provider from a perspective of both short and long-term value delivered. Consequently, they will tend to judge pricing relative to that perspective of value.
Here’s something else he said in our conversation: “when I look back at the decisions I made related to pricing, I just shake my head.” I replied with a version of what I always say in such circumstances: the important thing is not what you did back then, because very few of us, as professional services providers, get pricing right early on. The question is what you're doing about it today.
Yep, it’s always a journey.
Image created using Craiyon (Formerly DALL-E Mini)
(This blog post was also posted on LinkedIn.)
©Ray Business Advisors, LLC and John Ray
About me: I help solo or small professional services firm owners with the confidence and positioning necessary to improve their pricing and change the trajectory of not only their business but their life.
I have a podcast called The Price and Value Journey, which features interviews with industry leaders and audio versions of my blog posts. You can find the podcast on your favorite podcast app.
I also have a book coming out in 2023: The Price and Value Journey: Raise Your Confidence, Your Value, and Your Prices to Grow Your Business Using The Generosity Mindset.
For more information, go to PriceValueJourney.com