Here’s a 1984 Honda Accord. Cost is probably $1,500 if you could find one.
And here is a Lamborghini Veneno. Price is $4 million. I’m not joking. Four million dollars.
Both of these cars could get you to the store and back, right?
So if they do basically the same thing, why is there such a price difference? The answer to that question gives us insight into your business (or career). If you have lots of competition (and I’m betting you do), what makes your clients stick with you?
Two basic reasons that I can think of
Reason #1: Emotion
Every single thing you buy is based on emotion. Not reality. Not practicality. Emotion.
You spend money with your insurance agent because it makes you feel secure. You could drive a cheaper car but you choose the giant SUV because it gives you a feeling of safety for your wife and kids. You could get that legal work done online for half the price but you use the expensive firm downtown because it gives you confidence that you won’t get sued.
Example: Jenny Craig
A company that does over $400 million in sales every year supposedly helping people lose weight. What would you expect when you hit their homepage?
Stats about the worst obesity epidemic in history?
Tips on how to control your appetite, choose healthier food, exercise?!
You see stuff like this
A freaking red velvet cupcake. Because most people, while they may want to lose weight, don’t want to join a program that promotes eating spinach and steamed carrots every day.
Reason #2: Supply and Demand
There were only three of those Lamborghinis made. Three!!
I don’t know how many of those Accords were made. Considering that Honda produced over 4 million cars last year, let’s just say it was a lot.
We know that prices rise when people want something and there isn’t much of it. That thing is scarce.
And here’s the takeaway.
Unfortunately, people start to run their business (or career) in a way that serves them. They think about supply (what they know how to do, or have a degree in) instead of demand (what people are willing to pay for). Mistake. Your customers don’t give a crap about you. Customers care about themselves. And they should. It’s a powerful thing to hand your money over to someone for a product or a service.
People don’t buy your “widget” for what it does. They buy it because of how it makes them feel.
You would do well to jump on a whiteboard or a Word document and list everyone who is currently a client of yours. How are you adding value to the relationship? It’s not enough anymore to just do good work. Go beyond that. Put some emotion into the transaction. Connect. Remind them of everything they get when they pay you. Maybe your service is nothing to write home to mom about. Make it worth writing home to mom about!
Real estate in New York City is expensive because they aren’t making any more of it. It’s scarce. But look at what you sell to the market.
Electricians aren’t scarce, coffee shops aren’t scarce, attorneys and bankers aren’t scarce. What’s scarce is serving another human being. Taking time. Understanding the wants of another. Putting in a little magic touch. That’s what people want. They want a delightful customer experience. You have a handful of customers who have spent large amounts of money with you. But you have no system for showing love to those customers. Someone spends $XXX and then what? Do they get so much as a phone call in two weeks? I’ve paid $50 for an oil change and gotten a courtesy call three days later. “Hi Mr. McLain, this is just a courtesy call to see how your car is doing.”
You say you would check on your clients but aren’t sure what to say. Say anything!
“You guys spend a chunk of money here. How’s the thing working? How’s the service? How’s it going? How’s life? I appreciate your business because this is how I earn a living. What else can I do for you?” That kind of thing scarce.