I’ve come across an interesting thing lately. We know that in this age of data mining and personalized browsing, that Google and Facebook are in a war to figure out who can provide the most creepily prescient suggestions in their advertisements. I know, it’s all about machine learning, my habits, blah blah. But sometimes I’m convinced they put something in front of me, just to get my goat. Recently, they put this headline in front of me:
To be fair, it’s not so much recently as it is consistent. For weeks I’ve been seeing this and similar messages. Here’s the formula. Slick, attractive, preppy, urban, and obviously successful professional profile sharing the key to earning $95k (insert a ridiculous #) per month. The secret, price your product at 3 times your rate and watch the clients pour in.
“Dear Core Values Consulting, I’ve been saving in my piggy bank, please take my cash…”
~ said no-one ever
In actuality the formula isn’t without a nugget of truth. Your clients and your price strategy are definitely related. If you price you materials at $20k, you’re probably looking at enterprise level clients. Presumably, you have the capabilities to deliver or to capabilities to get to the point where you can deliver that level of service. From the opposite perspective, pricing your product low is going to attract clients who are looking for the lower price points.
Lower Price Points
At some point in moving down the pricing continuum – from the $20k above, to …let’s say $150 you’re going to reach a prospective client that is not really ready to engage in web design, SEO, and/or social media management. Is that bad? No, not if you’re open, honest, and upfront to both yourself and prospective clients regarding the value of your time. After all, we live in a world where it is absolutely possible to get a website for $150, and probably less. But, if you’re a buyer, I’d caution against that extreme too.
Buying a website is akin to buying a new car. You can buy the cheapest car you can find, but at some point as you seek the cheapest product, the better value isn’t the cheapest price up front. And the same works as you start going more expensive too. The better value isn’t necessarily the more expensive car once you reach a certain point. Somewhere between (or the entire spectrum) between a Kia and an Acura sit the middle 80% of cars that return a solid value when compared with the extremes. I digress
More on Customers & Different Price Points
Customers have different price points but that should be expected. This is business, not fantasy. Some customers will have deeper pockets for the delivery of product but they will be much harder to find. Here’s what you can probably expect.
You can expect the number of clients with budgets 2x as high as a given rate to be 1/20th as common. So if you’re looking at 1000 clients with a minimum of $500 budgets, there’s going to be 50 with $1k budgets, 3 with $2k budgets, and a small chance that 1 will have a $4k budget.
Of course, the pool of potential business owners is much more vast than the 1000 listed above, but it lays out a basic calculus for client value. The 3 clients with $2k budgets will, by rough logic, equal the same revenue as 12 of the $500 clients. Of course 3 clients are much easier to manage from a scaling up, production, and client engagement perspective – so that’s preferable from an effort perspective. You can maximize your revenue and minimize your work focusing on landing these gigs. Right?
Well, that depends, can you land all those gigs? Because you’re not the only production house in town. Web designers are as common as oil change shops, maybe even more so. And the production value between one designer to the next is more varied. If a person has ever been worried about taking their car into a Jiffy Lube, they should be doubly cautious about taking their business to a random web designer. The web designer can do more damage to their business than a bad oil change can to their car. We’ll talk about this soon.
Bottom of the Barrel Clients?
Have you guessed who the “bottom of the barrel” clients are yet?
That’s right, they’re the clients with lower price points. In this marketing paradigm, anyway. This is the part that gets me riled up. A client shopping for a good deal is most certainly not a bottom of the barrel client, they are conscientious of their budget. While true that they may not be able to afford your services (if you’re the $20k enterprise level developer, or SEO guru)..but they may not always be that way.
This is a banal statement though. No kidding, we ALL know 100 businesses who can guarantee us they will make it. If we can just wait for them to succeed we’ll be paid back, totally.. Sadly, that’s something you start to hear a lot as a business service provider – and it sets you up to be jaded (and susceptible to the kind of marketing that this whole article is about).
Clearly, only a small number of businesses will actually will make it long-term… why? Financial reasons, life reasons, market reasons, and 1000 other reasons. I bet you $1 that if they aren’t working with you as a web developer or SEO guru, that’s one of the key reasons their business failed.
Keys to Success
As service professionals, we should be cognizant of the level to which we intend to serve our clients. That means, that in addition to fulfilling a service or product (web design or SEO or anything else), we should seek to understand where we exist in our prospective and existing clients’ business plans. Simply put, we can’t serve websites like we’re serving a pizza.
A website for a business is a personal reflection of the essence of that business. Whiz-bang gadgets are cool, but if they don’t reflect the client, they’re a distraction. Likewise, if we’re seeking the cash cow, we’re going to lose sight of the opportunity to be part of greatness. The hunt for unicorns is not so simple as listening to someone else’s’ marketing pitch, paying into their system, scoffing at “bottom of the barrel clients,” and watching your business be successful. Still, if you want to give someone else your $ to give you bad ideas for building a business, that’s the kind of decisions you’re paying yourself to make.
Arguably, you have the ideas backwards on this. This whole deceptive marketing platform – playing into your anxiety and frustration is cashing in on you having it backwards. The whole pitch is to get you chasing unicorns and shelling out cash the whole time. You should be creating deep value, intense, supportive relationships with your clients. You should be providing them more value than they’re paying for. And you may not realize it, that by doing this you may be a big part of their success.
Successful Clients are Ever-Green Clients
Evergreen content is an SEO phrase meaning great, timeless material, that once posted – drives visits for years. It’s always fresh. It’s the holy grail of the content development wing of SEO. And a great blog will be heavily evergreen. An evergreen client, in this same sense, is one that continues to seek a relationship with you as a service provider for years. You create evergreen content deliberately, and you earn evergreen clients deliberately. If you’re deliberately unsupportive of clients in search of cash-cows, you’ll only ever have transitory relationships.. and you’ll be missing the opportunities that come from helping another business achieve wild successes.
If that’s your goal, we’ll happily support them. We don’t see them as bottom of the barrel, we see low price point businesses as poised to do great things. And we’ll deliver more product than they pay for every time.