A large part of my day-to-day work is applying marketing strategy to help people make a successful transition into consulting.
And some of the most common struggles I help them work through are variations on, “My industry is so price-sensitive. There are too many competitors, and they’re basically just giving away their services for free, so I can’t charge more.”
New consultants will often launch their services by offering deep discounts, attempting to earn early clients based on price—hoping to transition them to higher fees later on—or gain profitable referrals from unprofitable work.
But they might then find out for themselves what Jack Trout and Al Ries wrote in The 22 Immutable Laws of Marketing: “There’s more and more evidence to show that sales [and discounts] decrease business in the long term by educating customers not to buy at ‘regular’ prices.”
In other words, it’s intensely difficult to raise our prices once we’ve taught the market to accept a lower value for our services.
So what can you do instead of lowering your prices to get new consulting clients?
You can first determine the true problem, which really isn’t price-sensitivity at all.
As Felix Oberholzer-Gee put it in Better, Simpler Strategy, “If the value stick of a business closely resembles the value stick of other businesses, how do you suppose customers choose? They will focus on price.”
When clients see services as a commodity—where they can compare apples to apples—they will make their decision on price.
How else would they choose?
Which means, to be profitable, a consultant needs to be functionally different from the alternatives, in a way that particularly appeals to a specific customer set.
And they need to understand the specific challenges and obstacles their clients face that create the necessary demand for their solution.
They can’t just offer the same services, to the same people, and expect to charge anything but the same low prices.
As Roger Martin wrote in Playing to Win, “The most important question is how to delight customers in a distinctive way that produces greater willingness to pay.”
So when I work with consultants on their marketing strategy, we start by identifying the unique aspects of their business that their best clients especially appreciate.
We determine the elements of their business that are most profitable, both financially and emotionally.
And we spend time figuring out what they have the capability and interest to become the very best at.
As Blair Enns wrote in the Win Without Pitching Manifesto, “Expertise is the only valid basis for differentiating ourselves from the competition. Not personality. Not process. Not price.”
Once they’ve established their areas of expertise and profit, I help these consultants build and focus their market position around those elements. And we target their marketing efforts to pinpoint a specific struggle or challenge their ideal customers are likely to face—one that they’re exactly suited to help overcome.
When a consultant has those pieces in place, selling becomes just a matter of demonstrating what it’s like to work with them. They’re able to start charging prices that better meet their needs, because they have eager clients who highly value what they provide.
As Greg McKeown wrote in Effortless, “Being good at what nobody is doing is better than being great at what everyone is doing.
“But being an expert in something nobody is doing is exponentially more valuable.”
If you’re struggling to raise your prices or launch your consulting practice, don’t give up. Don’t assume it’s impossible.
Just work to identify what you’re best at, what you love doing most, and the potential clients who value that above everything else.
And focus every single bit of your marketing around that position.
Your new clients will be happy to pay you profitable prices.
Because there’s no other consultant who can help them like you can.