Natalie J. Armstrong,
www.MarketingMediation.com

PRICING AND POSITIONING –
This week’s story of a service provider who found more success than he could imagine simply by repositioning himself. A family friend here in Los Angeles has been a structural engineer for more than 30 years. He worked and struggled in this very competitive industry to build himself a small but profitable firm.

He had several assistants and draftsmen. And in this modern era of computer aided engineering he has remained true to his art and provides his clients detailed, delicate, hand-rendered specifications. Although his skills and talents are vast and great, he was loath to charge more than his competitors for fear of losing the business he had so carefully cultivated.

One night at a dinner party he was lamenting that although his firm had grown, his personal profit had remained nearly the same and in fact he was spending even more time away from his family since he not only had more jobs but also many more staff to manage. He was considering closing his firm and taking an early retirement. Well my father (from whom I have learned most of my communication and marketing skills) made a simple suggestion that moved this hard-working man and his practice into the top 1% of his field.

His suggestion was this. Let go of your draftsmen and assistants.

My father advised, “Next time a potential client calls your office let them know that your calendar is booked, you have more work than you can handle, but that for a “rush fee” you might be able to consider their project”. Now since our friend would be letting go his staff, the statement wasn’t a falsehood.

He next suggested that the price for a set of drawings should be raised raised to level of the top 10% of fee schedules in our area. His reasoning = people expect to get what they pay for. If you charge a minimum fee folks assume they will get a minimum service (i.e. if you charge a competitive fee they assume they will get a competitive service, etc.)

Our friend more than doubled his prices, let go his staff and high overhead. He asked his wife to help him in his newly obtained two-room office. She was instructed to let potential clients know that we was already over-booked, but as a personal favor to them, she would ask her husband to consider their project (at a much greater fee of course).

She is an artist in her own right when it comes to creating a sense of urgency and demand for her husband’s drawings.

Within the first year of their transition our friends had made more money than in the past decade’s history of their now defunct firm. They were finally able to travel internationally and visit their children and grandchildren at their leisure. They have moved our of their tract home in the suburbs and built their dream home in one of the worlds most expensive neighborhoods.

They work less and earn more. They charge more and play more.

Our friend and his wife have created a thriving practice simply by establishing the perception that he was the best and most sought after. If you want the best structural engineer in the area (and trust me, in LA you do) then you pay the price and wait on line.

He truly IS one of the very best and his fees now reflect his skills.

From a marketing standpoint, it’s all about perception. The perception of the general public is that they will get what they pay for.

Natalie J. Armstrong is the Founder and Managing Director of Golden Media, a marketing and consulting firm dedicated to promoting the resolution industry. She is the author of The Essential Guide to Marketing Your ADR Practice and speaks internationally on business development and the successful marketing strategies of the conflict resolution industry. More ADR Practice Development articles and information about Ms. Armstrong and Golden Media can be found at www.MarketingMediation.com.