Today’s post is a guest post by my trusted colleague Heather Seitz, of Email Delivered.
-Ray Edwards

More often than not, we assume that the main reason people aren’t buying our products and services is related to price.

The truth? It’s not price at all. It all comes down to value!

If the value is not there, then people are not going to spend the money on whatever it is you are selling. It doesn’t matter if it’s a $17 eBook or a $17,000 coaching program, or something in the middle, if the value isn’t there, you’re not going to spend your money.

And let’s face it… in the current economy, just about everyone is a bit more discerning about where they spend their dollars.

So how do you determine “value”?

That’s the million-dollar question… Let me illustrate with an example of something that happened recently where I really “got” the concept of value and how it relates not only to the decision of whether or not to buy, but also to the overall perception of your customers – and, as a result, the long term impact on your bottom line.

(As you read this case study, think about how this applies to your business and how your prospects react to your “offers”)

We were getting ready to do a complete system redesign (from the ground up) of one of our web applications.

We met with the developer and spent a good bit of time sketching out screens, processes, and flow of the design. We detailed all of the system requirements and went through a number of user interfaces, highlighting what we liked and didn’t like.

The meeting went well and we were ready to get started.

He’d estimated about 80-100 hours to complete everything. We were happy with this and excited to move forward.

Two days later, an email arrived with the mockups (based on our discussion). There were 5 attachments in total (4 mockups and proposal).

I started with the mockups first.

First impression: “not bad”. I wasn’t WOWED or blown away, but they were “okay”. It looked like he got about 80% of the concept we were going for, but missed about 20%.

It’s as if they tried to model existing interfaces, but “missed”. There was just something off – that wasn’t quite right. He certainly hadn’t nailed it! I wasn’t “excited”. (Check out the book “Blink”. It talks about this concept and the fact that we all make snap judgments based on first impressions. And even if we can’t articulate what’s wrong, we know when something’s not quite right!)

This isn’t the major problem, however! I realize I demand a lot out of design and was fully prepared to participate in this portion of the project, even editing Photoshop files for the UI designer if need be.

The BIG problem came when I opened the last, and final, document: the actual proposal.

What was supposed to be 80-100 hours came in at 200 hours! Yep, more than double the higher range of his verbal estimate.

What’s more is that it was basically little more than a new user interface. We had spent HOURS going over the fact that we wanted to build EVERYTHING brand new and on an entirely different infrastructure. That wasn’t included… and would cost another $5,000 – $7,000! So what started off as a $8000 – $10,000 project was going to cost us closer to $25,000.

Talk about sticker shock!

We were mad… frustrated… felt deceived… etc.

What happened next was where the big lesson became clear!

My partner asked me this question: “If we were starting this application from scratch, and it was everything we wanted, would we be willing to pay that?”

The answer was, “Sure… no problem!”

That’s when it became crystal clear!

What we had wasn’t a “price” problem. It was a value/trust problem…

It wasn’t the money we were asked to pay, but what we felt we were getting in return for that money.

I took a step back to really think about the experience and what I took from it was a huge lesson in value and customer perception. Here are some lessons we can all use in our business:

1. Initial Impact. Does your “look and feel” match your message? Appearance matters. And the “good enough” bar has shifted. People place value on how something looks and what that first impression is. And remember that “Blink” concept I mentioned before. If it doesn’t FEEL right, then you’re already at a disadvantage before they get to the actual message (and offer). This can impact whether or not the initial sale is ever made.
2. Value. Are you demonstrating value in such a way that your customers are HAPPY about the exchange? (Their money for your product or service). Your customers should feel that they got an incredible deal. This is the key to repeat business. If your customer decides to evaluate the competition before making a decision, you’ve failed – or at least stumbled a bit.
   
3. Trust. This is a little harder to quantify or define. And it didn’t actually hit me right away in the story above. It took a few minutes on this one! Considering we were expecting an estimate to come in around $8000 – $10,000 including some wiggle room, when we got the “proposal” with a estimates for each segment which were admittedly “padded”, we felt that we were going to get ripped off… that we’d get a little ways into it and that the scope of each section would multiply just as the initial estimate did.

The problem with “trust” is that one it’s gone… it’s gone! And it’s very difficult to gain it back.

You can always change the image of your website or add more “value” to your product or service (or simply change your message to convey the value that’s there). But you can’t simply wave a wand and regain trust.

So the question is… do your customers trust you? If not, what can you do to establish that trust and CONTINUE TO EARN IT?

I just stumbled upon these numbers at the Desiring God website.

“The population of the world just crossed the seven-billion mark. There are currently an estimated 2.26 billion Internet users worldwide — one billion of which are from Asia, and only 273 million of which are from North America.

Here’s the current breakdown for Internet use globally:

Asia: 1 billion Web users (26% penetration)
Europe: 500 million Web users (61.3% penetration)
North America: 273 million Web users (78.6% penetration)
Latin America: 235 million Web users (39.5% penetration)
Africa: 139 million Web users (13.5% penetration)
Middle East: 77 million Web users (35% penetration)
Australia: 23 million Web users (67% penetration)

Sources: Nielsen Online, UN International Telecommunications Union, GfK, local Regulators and other reliable sources.”

I’m willing to bet most American websites are oblivious to the other (majority) “World Wide Web”.

What does this tell us?

When you are being compared to your competition, do your customers see any compelling difference? In today’s environment, they must! If they don’t, your business is already in trouble.

Here are three simple but compelling qualities that will make your business stand out from the competition:

1. A great first impression. It’s true, you never get a second chance to make a good first impression. Too many people (and businesses) miss this opportunity, or worse, they botch it. Pay attention to details, especially on your website. Prospective customers will examine it closely for inconsistencies, errors, misspellings, outdated information, and false claims. Take great pains to make a good first impression.

2. Quick response. As simple as it may sound, answering the phone after no more than three rings… returning phone calls the same day… following up with e-mail correspondence quickly… all these “little things” can build trust in a remarkably short period of time. The reason: people are so accustomed to being disappointed in this area, that even if you simply meet your obligations, you will impress them. Exceed your agreements, and they will be astounded.

3. Go the extra mile. Perform unexpected service for your clients-such as early delivery, coming in under budget, delivering more than was promised, even losing money to make a complaint right. These kinds of “extra mile” gestures can win you a customer for life-certainly worth sacrificing short-term profits for the long-term gain.

It’s not always easy to stand out – but it is usually simple.

SPECIAL NOTE: For a limited time, you can become a member of my new Writing Riches Community at our special Preferred Member Rate. Right now, membership is a no-obligation $97… but in the near future, we may raise the price to $147. Click here right now to lock in your Preferred Rate and save $50.

I am a strong advocate for creating good boundaries in your business, and it holds especially true for freelance copywriters..

Training your customers on how to do business with you, so that you can maximize your productivity and profits, is vital.

But I don’t like to be the guy who always says “no”.

I like to find ways to say yes.

Example…

I don’t haggle over my rates as a freelance copywriter and marketing consultant.

Does that mean that when I am in conversation with a new client, I’m quick to quote an astronomical rate, and turn them away if they suggest a lower payment? Not at all.

I simply look for ways to change the nature of the offer, so that I’m able to accommodate their rate request.

It’s as simple as asking a few targeted questions:

1. “If we were able to lower the price to what you ask, would you be ready to do business today?” If the answer to this question is no, the discussion is really over isn’t it?
2. “What part of the project seems most important to you, if we were able to deliver it for the price you suggest?” This helps identify pieces of the project you may be able to eliminate, thus also eliminating the expense created by that particular activity, giving you more flexibility in your rate.
3. “What makes you think our service is only worth the amount you mentioned?” You have to be careful of your tone of voice when asking this question; you don’t want to sound confrontational. But the issue may simply be one of the perception of value. If the client doesn’t feel that having me consult on a product launch is worth $50,000 upfront, no amount of sales technique will get them to write me that check. I need to determine where they feel the value is.

While these suggestions may not turn every price negotiation into a business deal, they will help you find ways to say yes to proposals you might’ve said no to in the past.

And that can dramatically increase your bottom line.

If you’d like more tips on how to market your copywriting services, you’ll want to get on the notification list for my upcoming newsletter. It’s called “Marketing Your Copywriting Services” and it’s just for copywriters. Copywriters who want more clients… juicier assignments… and bigger fees… fast.

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You might think I’m late with these predictions.

After all, most everyone who had any interest in making such prognostications has already posted theirs.

But I’m not late.

To paraphrase Gandalf, the wise wizard from the Lord of the Rings stories, “A prophet is never late, nor is he early. He arrives precisely when he means to.”

Here are 7 predictions for 2012 from your ol’ Uncle Ray.

1. Faith will play a more pronounced role in the Presidential election. Sure, it’s always an issue. But in the past it has, more or less, been tangential. This time, with the mix including President Obama, Ron Paul, and Mitt Romney, I see this becoming a forefront discussion. Is America ready for a Mormon president? And if you think a President’s faith doesn’t inform his politics, you’re a wee bit daft.




2. The economy will not collapse nor resurrect – it will change, though. Chicken Little, settle down. Pollyanna, you might be disappointed. It is a new world order, just not the one many were expecting. It’s a new game, with new rules, and some new players at the international table (hint: can you speak Chinese?)




3. More people will see their answer to money woes lies in starting a business. We need entrepreneurs – not merely technicians with independent shops. Technicians merely siphon off pre-existant streams of wealth. Entrepreneurs, on the other hand, actually create wealth. Many of these entrepreneurs will come from the ranks of the church – as more believers realize it is time for the church to stop simply having a message, and to start being a message. Spirit-filled entrepreneurs will demonstrate what it looks like to have God’s favor on our lives — including our businesses.




4. The Google game will be harder to play on all fronts. I wrote this before Google changed their search fundamentally with the “Your World” update. Would that I had published it a day or two earlier!




5. China. See prediction #2.




6. Being debt-free will become the new American status symbol. Turns out the Book of Proverbs is right: the borrower is the slave of the lender.




7. “Internet Marketing” (ie, marketers who sell marketing advice to marketers who sell marketing advice) will be harder… but “information marketing” (selling your knowledge and expertise) will still be insanely profitable.

So – what to do with these predictions? They are of little value if not joined with action. Within each is a kernel of encouragement. A seed of hope, possibility, and potential opportunity.

The diligent will find and seize upon these possibilities – and the many others not mentioned here.

I do acknowledge reality, by the way.

Is it tough these days? Yes, in some ways.

Is fear running rampant on the Earth? Yep.

Many wish these times had not come upon us. Perhaps you, too, wish our present times were different.

To quote Gandalf …

“So do all who live to see such times. But that is not for them to decide. All we have to decide is what to do with the time that is given to us. There are other forces at work in this world… besides the will of evil. And that is an encouraging thought.”

Indeed.

You probably know about the Pareto principle.

It’s the principle discovered by the Italian mathematician (whose last name was, surprisingly enough, Pareto) that states something like the following: 80% of the results in any system arise from 20% of the inputs in that system.

In the world of business, the Pareto principle is commonly invoked when noting such mathematical oddities as the fact that 80% of the sales are generated by less than 20% of the sales people; 80% of the revenue is generated by less than 20% of the customers; 80% of the leads are generated by less than 20% of the phone calls… and so forth.

As an entrepreneur, it is profitable to think about the Pareto principle in the following way: 80% of your results will flow from only 20% of your activities. They should become a liberating truth for you. It constitutes mathematical permission for you to focus only on the 20% of things you like to do anyway. The truth is most entrepreneurs are people who enjoy “visioning”-or, as my private client Frank Kern likes to put it, “scheming”. This doesn’t imply anything evil; it simply recognizes the fact that entrepreneurial types tends to enjoy coming up with the big ideas, seeing the big picture, laying down the strategy, and leaving the cleanup and details to others on their team. In the world of the Internet, there is an ethos that if you can do it yourself you should do it yourself. This has had the result of locking up entrepreneurs in a prison of detail work.

No entrepreneur should be installing WordPress blogs, debugging scripts, or figuring out how to make the latest plug-in work… unless this is out of financial necessity. And assuming that you’re any kind of entrepreneur at all, the period of financial necessity may exist from time to time, but should be short-lived.

The prosperous practice of the Pareto principle simply means: only do the stuff you’re best at, the stuff that gets results, that puts sales on the books, new clients on the roster, and “moves the needle”. Anything else is a waste of time.

SPECIAL NOTE: For a limited time, you can become a member of my new Writing Riches Community at our special Preferred Member Rate. Right now, membership is a no-obligation $97… but in the near future, we may raise the price to $147. Click here right now to lock in your Preferred Rate and save $50.

Add this book to your list of must-reads: The Ultimate Sales Machine, by Chet Holmes.

If you haven’t read it, move it to the top of your list.

If you have read it and haven’t yet implemented every single strategy inside its covers, read it now. Again.

Probably my favorite passage from Chet’s masterful business work is one that most people read without understanding its import. In the early pages of the book, Chet points out that most people will read his book, agree with its precepts, and still not do them. He says this is the “reverse psychology” section of the book, in which he attempts to prod the reader into doing what needs to be done. In Chet’s words, “I’m goading you into applying a powerful force for creating success from what you’re going to learn… and that force, my friends, is pigheaded discipline and determination.”

Pigheaded discipline is the subject of this post for very good, and simple, reason. That reason being the fact that this is the most-lacked skill in over 90% of entrepreneurs. In my experience, what stands in our way, what holds us back from our potential, is usually not some external force (such as competition or marketplace conditions)-it is, rather, our own inability to say no to the things that distract us from our most profitable activities, and our continued inability to say yes only to those activities that produce the results we seek.

It is as if the world conspires against us to lead us down this path to destruction. Most of our peers, and certainly most of our employees, are happy to tell us what we should be spending our time on-and almost without fail their advice is dead wrong. It usually doesn’t come packaged as advice, by the way – it usually comes packaged as a meeting… a phone call… a personal plea… or some kind of interpersonal conflict. None of which are, perhaps, designed to take us off target- but all of which inevitably do.

Guard your heart carefully, eternal entrepreneur, and focus only on the things that expand the kingdom. Employ pigheaded discipline.

SPECIAL NOTE: For a limited time, you can become a member of my new Writing Riches Community at our special Preferred Member Rate. Right now, membership is a no-obligation $97… but in the near future, we may raise the price to $147. Click here right now to lock in your Preferred Rate and save $50.

“There is nothing either good or bad, but thinking makes it so.”
William Shakespeare

I will leave the discussion aside as to whether William Shakespeare is indulging in moral relativism.

I think he is not, if one reads the above quotation in context, but I do think the quotation illustrates a basic principle we, as entrepreneurs, would be profited to recognize and employ with more frequency.

It is popular, in our culture, to be well versed in bad news.

It is popular to be able to quote the bad news, and to elaborate upon its badness, and one is presumed to be more erudite and wise for doing so.

But as entrepreneurs-those who create something from virtually nothing-I believe it is the kiss of death. It is a way of limiting ourselves, of violating the principle of the best use of resources.

The best and highest resource we possess is ourselves, and that never brought so into focus as in what we think about most of the time.

I don’t believe it’s possible to talk about the bad news all the time, without also thinking about it all the time. And it should stand to reason that thinking about something all the time tends to put one’s focus on that something, and that focusing on something inevitably draws us closer to the something.

I’m not talking about mysticism here.

I’m simply talking about the fact that the more we tend to think about a thing, the more likely it is that our behavior, actions, attitudes, and lifestyle will come into alignment with that thing we’re thinking about.

So the “bad news” is this: thinking and talking about bad news all the time might make you seem smart, but it inevitably makes you dumb, and what’s more it likely will make you broke. In the rare cases that it does not make you broke, because you have in some perverted way discovered how to profit from bad news, it will make you soul-sick.

Yes, I’m sticking my neck out on this one. But my poster child for the premise of being rich but soul-sick is Howard Hughes. And I don’t think any of us wants to end up like him, hoarding our fingernail clippings, living on orange juice, and slowly going insane.

The good news is, there is obvious profit in thinking and talking about good news. In looking for the good news in every situation. It is after all, as entrepreneurs, what we are paid to do.

Let’s go do it.

SPECIAL NOTE: For a limited time, you can become a member of my new Writing Riches Community at our special Preferred Member Rate. Right now, membership is a no-obligation $97… but in the near future, we may raise the price to $147. Click here right now to lock in your Preferred Rate and save $50.