“When you start to discount your product and service fees, you discount yourself” – Matthew Hill, 2018.
Warning – This is a deliberately challenging piece for independent coaches, trainers and mediators – Here we face your fears and habits! If you are feeling brave today – please read on…
As marketing guru, Seth Godin states, discounting represents, “A race to the bottom, and, nobody wants to win that race.”
“Lower your prices!” – The command of many larger companies
Yes, we are asked to lower our prices. Tesco have bullied many a supplier in search of an illusive extra 1% margin. And where are Tesco now? Recovering from a UK scandal around playing fast and lose with numbers and suppliers. Or, GE.
GE famously hit a new moral low in the late 1990s when they asked their hard working and loyal suppliers to enter a reverse auction to compete with each other to offer the cheapest rates for their established a premium quality services. The losers won that round! Damned if they did and damned if they didn’t.
***Shame on all bullying corporations***
(I believe they have seen the error of their ways and now moved from their macho transactional approach to a more relational and strategic one, that, surprise, surprise, serves both parties better.)
Are THEY Discounting?
Do the biggest software providers, retailers and banks offer a 70% discount to their largest customers? – Do they give away the best of what they have because they feel they have no choice and are experiencing a little light bullying? NO! –
Then why do we?
When you discount – You devalue.
Eventually, when you, or your market, are fully commoditized, the corporate customer will select their suppliers based on how near, quick and cheap you are. Your premium quality product is now a tin of supermarket tomatoes. End of Story. Again – Is that what you want?
Defend your value
At the moment, there is a bizarre training phenomenon out there, where the webinar version of the classroom experience is being given away at unsustainably low prices. I have no clue who started this, why it continues or why those involved don’t wake up, smell the coffee and correct this damaging business practice. Is all learning devalued by making it remote? Are the corporates deliberately ordering an inferior service from us? What is happening here?
Supporting your price.
Continuing with the webinar example. The point that is being missed by the discounters is value. Your course either has intrinsic value or it does not. If it does, then it makes sense to highlight that value, defend that value and, logically, charge out at that value.
Cost – One purchasing department argument runs like this – The provider saves money on travel and hotels when they don’t have to perform at a hotel or corporate office, and, they should pass back that saving. Yes and remote learning sessions save the company more money, so that is not a compelling argument. The saving has already been made at their end. There is no need to erode the trainer’s price.
Quality – The real cost is hidden from view. The widespread practice of discounting training rates takes out senior trainers from the marketplace, as they cannot afford to work with these silly rates. When juniors take their place, outcomes deteriorate and the supplier brand is diminished. This then prompts the corporate…to ask for a further discount. Is it only me that thinks this is short termism taken to an absurd degree?
Confidence – Individual trainers, coaches and mediators suffer from imposter syndrome, inferiority complexes and financial scarcity. We need to get over all three. Everybody has imposter syndrome – the only people not affected are the truly deluded. On a good day, you either think your product is worthy or you don’t. If not, you need to plump up your LinkedIn profile and get a job with a salary. If you value yourself, good for you – Now start charging sensible prices. If you are suffering from an inherited poverty script – Deal with it – See the T Harv Ekker Millionaire Mindset film – Link at the bottom.
What if we lived in a world driven by fair value, where experts were respected and encouraged to share their wisdom in exchange for reasonable reward? A world where they could give of their very best, knowing they are appreciated and can work without fear, giving openly, partnering with the best, striving for the most productive mutual outcome? How glorious would that be?
The next time a principle or corporate asks you to shave your fee – Stop and think. What does this mean? What is the cost today? And, what will the cost be tomorrow – For you and the business world? Let us value what we do. Let us value ourselves and let us be courageous enough to ask what we are worth.
It begins with self-respect, saying no to discounting and asking for fair value fees.
Negotiation – When you are told you are too expensive – be warned – it is a trap – image what they are really saying is, ”that you need to get on a slippery slope that ends with poverty, frustration and exploitation.”
*Remind them you are not in the tinned tomato business but offer Intellectual Property Assets that are essential to the future of their business.
*Remind them of your qualifications, experience, knowledge and wisdom.
*Expand on the value you provide and move away from price.
*Explain that value is related to the benefit they receive not just the short term damage they can do to you by taking away your money.
*Claim your worth with price and confidence.
*Stick to your guns, employing the broken record approach to communication, and,
*Start to celebrate your new financial independence and recognition. You have earned it.
Good luck claiming your full worth.
About the Author – Matthew Hill helps independent Trainers, Coaches and Mediators build their independent businesses allowing solopreneurs to project the best of themselves to the best audience possible, and, at the BEST RATES. Here is a link to Matthew’s Going for Growth in 2019 coaching bundle.
Film Reference – Here is a great film by T Harv Ekker on poverty and wealth mindsets. Do yourself a big favour – Get the family to block out an hour this week and watch it all together.