Thursday, February 15, 2007

Lowest Price Costs $

This is a follow-up post to comments about Firing Clients. Clint mentions low price versus value. And some other emails were about just low price. Let me state for the record that Pricing is probably the biggest problem you face. Many want to be "price competitive" or as close to the bottom as possible.

However, I have sub-agents and prospects and people on isp-bw who want the bottom rate. For me to take the time to shop for that rate has a cost. To only win 10-15% of the time makes it a high cost. (You can be the lowest bidder always -- and even then you may not win). The pay-out is lower because the price was lower. It's an all around losing proposition, because the one that wants the lowest price is usually also a PITA. So support is high on low margins. Why Bother?

Many business owners have visions of tens of thousands of customers. It's a nice vision, but what the focus should be on is adding one valuable and profitable client after another. In scaling an operation to handle a 1000 low paying clients is expensive -- cutting the margin even more. Have only a 100 clients with double the margin means I can give better service to that hundred.

Back to the value. What value? Better customer care for one. Hand holding. Research. Tips. And all the other little things that separate me from the lowball pricer.

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