Whether you provide conventional IT, cloud backup services, professional automation packages or high tech security, you can and should charge your customers more than you currently do. Here’s why.
First, because smart B2B service providers target companies that can afford to pay more.
Hopefully you have done that, whether your marketing is done by word of mouth, Internet or traditional advertising. If the companies you are prospecting have nice facilities, that is the first indicator that they can afford to pay more for professional services like yours.
The next indicator can be found by a simple search: Who do they do business with? Often, you can find that information by checking out the LinkedIn page of the department head you plan to contact. If he has worked with other service providers of your caliber, that should dispel any hesitation you have about charging a price that is on par with your high quality service. If he will pay more for them, he will pay more for you — as long as your service is as good as you say it is.
Next, because clients appreciate value — period.
As a professional yourself, you understand that cheaper isn’t always better. Give your prospects some credit by acknowledging that they understand that, too. No matter where you are located, there are companies that are willing to pay more if it means they will receive higher quality products and services. Sometimes that means targeting prospects in nearby areas that are slightly more affluent, and that’s okay. If you need to expand your service area in order to generate more revenue, it can be another justification for raising your rates. Customers that know your predicament will understand that it’s part of the cost of doing business.
At my company, a factoring service located in Lake Forest, CA, I service businesses throughout the entire Southern California region; that’s five counties. Do my rates reflect this? Yes. Do my clients mind? Not at all, because they appreciate that I 1.) Provide a valuable service they need, and 2.) Work hard to provide it to as many businesses as possible. They know how much gasoline costs, and they know how much a person’s time is worth. They’re smart, and your customers are too.
Finally, because businesses want someone they can have a relationship with.
Despite the flash of modern corporate buzzwords, today’s businesses would still rather work with service providers they can trust for years to come, rather than “leverage vendors they can organically sustain an interface with going forward.” In other words, they value substantial relationships over buzzword-laden style. If you can deliver the service that forms the foundation for a long term relationship, your prices should reflect that.
In my case, I have noticed my clients are willing to pay more because they see my demonstrative willingness to have an ongoing relationship with them. When I begin to have reservations, I just look at my testimonials page and all doubts go out the window. If you can show clients you have a vested interest in your relationship with them (not just their success as a result of your services), then it is completely reasonable for you to adjust your pricing. The depth of the relationship you will provide them is worth it.
When you decide it’s time to charge your new customers more, you will be doing yourself two favors: 1.) Increasing your revenue, and 2.) Gaining their loyalty. The trend of consumers showing more loyalty to services for which they pay a premium is well-documented; why shouldn’t one of those services be yours?
Donald D'Ambrosio is an expert in factoring, an alternative financing option for small to mid-sized businesses. Prior to establishing his own company, he held both CFO and corporate controller positions with a well-known, publicly traded financial services firm. He is also a diversified cash flow specialist and speaks to businesses in a variety of industries regarding their options for increasing cash flow to fund their operations. D'Ambrosio is based in Lake Forest, CA; he can be contacted at www.oxygenfunding.com.