This is the “how to” follow up to my previous post titled, “Your Pricing Approach: Wallflower, Arrogant Jerk, or Brilliant Conversationalist.” Here, we will be covering the “brilliant conversationalist” pricing method and you will need to create a three-column worksheet with the columns titled “Thing,” “How Help” and “Worth,” respectively.
In the first column, list all the things your customers and prospects want to achieve by purchasing your product and services. For example, assume you run a hearing aid clinic. One of the things you may list in this column is that your customer wants “better ability to hear conversations.”
Move to the second column, the “How Help” column. For each item in the first column, write down how it is that your product or service helps your customer achieve that thing. Be as specific as possible.
Following our hearing aid clinic example, you might write that you match your customer with the best hearing solution for their specific hearing loss profile, attitude, and price profile.
Now move over to the third column. For each item, you want to identify what you believe achieving that thing is worth to your customer. A lot of business owners find this step challenging because it is often difficult (or impossible) to put a number to how much some items are worth to your customer.
But just because you can’t put a number to something doesn’t mean it isn’t important. In fact, sometimes the most powerful benefits your products and services provide can’t be measured by a monetary value. So if you can’t come up with a specific number, that’s completely fine. In those cases, provide a subjective description of what you believe it is worth.
Following our example, you may identify the hearing aid as being worth “more fun and enjoyment when dining with friends and family by being able to fully participate in conversations again.”
This step is a bit more involved and there are two things to say about it. The first is that most business owners who read this post will NOT take action and do this step because it takes some effort.
The second thing is that it is THIS step that really gives the power to the brilliant conversationalist pricing method. In this step, you ask some of your existing customers “What does buying our product or service mean to you?” And then you listen and record what they say.
This step allows you to take the benefits your customers REALLY get from purchasing your products and services, and relate them to the items you have put on your worksheet. The key in this step is to record exactly what they say, using the words they use. Even if what you hear is something you never even thought of – record it. Because you are hearing (remember, this is a conversationalist approach to pricing) what benefits your customers receive and what your products and services really mean to them.
Continuing with the example we’ve been using – you could find that your customer tells you that what they get from buying your hearing aid is the ability to hear what their grandchildren tell them without always asking them to repeat it; or being able to hear their granddaughter recite her wedding vows. Now you can relate the items you’ve listed, the benefits you have identified, and the benefits your customers tell you they get to each other.
Use this knowledge to set your prices with much more clarity and confidence. You will almost always find this exercise gives you the confidence to raise your prices based on the value you provide. This will give you a nice bump in profitability, and make you even more proud of what you do.
So go ahead. Have a conversation with your customers. You will NOT regret it – ever.
Conversation Photo via Shutterstock
Okay. I’ll try. 🙂
Very interesting and informative. I give this post 5 stars!
Excellent advice and process. For smaller price items where it would seem impractical it brings to light that the best way to avoid Wallflower pricing is to not sell what everyone else does. Eventually the same comparable stuff must be sold at a price point pretty close to what everyone else does where something that is not directly comparable is not. Even Coca-Cola is difficult to compare when value is added by cupping it in different sizes in different places where there are no reasonable alternatives – like the movie theater.