The 3 harmful price-drop myths (and what you can do instead).

Janine on the phone looking distressed

The dust is starting to settle on this brave new world.

Coaches and consultants are starting to think about their long term plans.

But I am still seeing them DROPPING THEIR PRICES. 😱

In most cases this rash decision has been prompted by, dare I say it, desperation.

Never a good frame of mind to make business decisions in. Or any decisions for that matter. (See list of Janine’s old boyfriends for evidence.)

In this blog I’m going to bust some myths around cutting prices and show you realistic alternatives to prevent panic price plummets.

Misconceptions that might need extracting from your tender brain right now:

  1. Cheaper things are easier to sell- WRONG
  2. No one’s got any money at the moment- WRONG
  3. No one is thinking about buying your stuff at the moment- WRONG (probably)

Let’s take a look at each one in turn.

Price-drop Myth 1. Cheaper things are easier to sell

What evidence do you have to back this assumption up? Has anyone said this to you? If so, send them my way and I’ll give them what for.

Let me hazard a guess: you’re thinking about when shops need to get rid of stock so they slash their prices and announce a mega sale.

This logic doesn’t apply to selling services.

Take me for example. It now costs six times as much to work with me than it did this time last year. But sales are much easier for me now and yes, I have sold high ticket services since the lockdown.

Why? Because this time last year I wasn’t clear on my compelling offer and I wasn’t explaining why working with me was a ‘must have’ not a ‘nice to have’.

(Ironically, I’m fab at helping other coaches and consultants to do this. Cobbler’s shoes and all that.)

If you can pinpoint a chronic need that you can help with AND you can communicate it clearly; you’ll be able charge what you’re worth and clients will be happy to pay.

If you think this is taking advantage of people, read to the bottom of this blog. There’s a section there for you.

Price-drop Myth 2. The Coronavirus means no one’s got any money at the moment

There are SO many people that still have money and are even frustrated that there’s no way to spend it!

  • People sitting at home on 80% salary who can’t now spend it on going out or holidays
  • People’s businesses who haven’t been affected and some who are doing better than ever e.g. Sally Wynter’s CBD infused gin
  • People who have savings
  • Retired people who have a secure pension
  • People whose businesses are thriving; industrial cleaning firms, food delivery services, online entertainment services to name but a few
  • People who were about to spend a lot of money e.g. on a house move or major renovation, and now can’t move ahead.

In short, I’m calling bullpoo on this one. Yes, some businesses are suffering greatly and will have lost clients, but most coaches and consultants will be able to find some way to pull together an offer that a subset of their audience needs.

Price-drop Myth 3. No one is thinking about buying your stuff at the moment

People’s pain points haven’t gone away. In many cases, they’ve become more acute.

Do you sell directly to consumers?

Things consumers are struggling with more than ever:

  • Coping with stress and anxiety
  • Entertaining themselves and their children at home
  • Staying connected with friends and family
  • Finding leads and clients
  • Working out what to do next in their career and/ or finding another job
  • Managing their finances
  • Eating healthily and staying fit
  • Protecting themselves and their families

Do you sell directly to businesses (B2B)?

Things businesses are struggling with more than ever:

  • Coping with stress and anxiety
  • Staying connected with colleagues
  • Team motivation and productivity while remote working
  • Finding leads
  • Making sales
  • Short term and long term financial management and planning
  • Legally protecting themselves
  • Sourcing and supply chain management
  • Recruiting and onboarding

And my fave: Getting the fundamentals of their business straight. In other words; business and marketing strategy.

If you’re struggling to put together an offer that people will want to buy in the current climate, book a call with me. I bet 80% of readers will be able to put an offer together with minimal pivoting needed.

People are sat at home, getting round to DIY and gardening chores they’ve been avoiding.

They’re also wising up to the fact that the happenings present a unique opportunity to do those ‘working on myself’ and ‘get my business basics sorted’ jobs they’ve been putting off.

But Janine, I see people suffering and I want to help them, not take advantage of them you horrible cow!

I promise, you are not helping people by dropping your prices. You’re restricting your ability to pay your bills.

Have you thought through the repercussions of a price drop?

  • How will you increase them again, and when?
  • Are you prepared to sell more to get the same revenue?
  • How will your price cuts affect your brand position?

Will 10% or 20% drop in prices really make any difference to sales? If what you’re selling is £1000 now, are people more likely to buy it if it’s £800?

The only exception I’m willing to concede on is if you have current customers who are struggling to pay you but still desperately need your support. I’ve seen some lovely business owners offer their clients payment holidays and such like. But please don’t do this if it means you’re going to get into debt. Nobody wants that.

Things you can do instead of dropping your prices to help people

There are plenty of other options for helping people that don’t involve charging less for what you do:

  • Produce richer, more helpful content e.g. a free webinar
  • Design a new lead magnet that helps people with what they’re experiencing at the moment
  • Create an offer that is more affordable but takes up less of your time and energy to deliver

And if all else fails, take a step back and do some scenario planning.

Imagine a best, worst and a most-likely scenario. What do each of those worlds look like? How could you plan to adapt to each one?

Not keen on charging more?

I know that pricing can be a triggering and scary thing to tackle. That’s why I’ve put together this free guide 6 Steps to Charging More with 100% Confidence work book.

Click on the button below to sign up and get it. You’ll be signing up to my email list and can unsubscribe at any time.

Janine doing the OK sign with her fingers