What difference would it make to your business (and your lifestyle) if customers paid you more?
This might feel like a pipe dream, especially given the current economic situation and an increased expectation to get stuff for free.
However, it is a goal that is achievable if you put in place the right strategy and if you have the confidence to see it through.
That’s because there is a way to make it happen.
Let me outline the process…
First things first 🙂
If you are price focused, you will attract customers who are price driven. Price is an attractive differentiator because it’s very easy to compare like for like. However, price motivated customers frequently have very little loyalty. They are easily wooed by your competitor who is happy to undercut you and are less likely to stick around for repeat purchases.
What’s more, if you compete on price, something has to give. You’ll be tempted to cut corners to maximise your profit and as such quality diminishes. Even worse, you’ll start to feel taken advantage of and unappreciated. I believe this is common when selling handmade products. Often a price conscious consumer will see the product for what it is and totally dismiss all the love, time and creativity that’s gone into creating something unique and beautiful.
The fact is price conscious consumers are less interested in the stuff that’s important to you.
They want it cheap!
Now by all means, if you feel price is your unique selling point, stay in the “race to the bottom”.
If not. It’s time for a different approach.
Lose your unprofitable customers
Are you familiar with Pareto’s Law or the 80:20 rule?
It’s the idea that around 20% of a given factor is vital, whilst the remaining 80% is less significant.
In your micro business this means that around 20% of your customers will generate 80% of your sales and your profit.
What would be possible if you lost some of the 80% (which often take a lot of your time) and focused on nurturing the relationship of customers and clients who fall within your top 20%?
Now if the idea of actively losing paying customers brings you out in a sweat, let me give you some reassurance!
Attracting a continual flow of new business is obviously good for your long-term survival and sustainability. BUT if you consistently attract the wrong sort of business, that additional work can become a headache, take longer and leave you less fulfilled.
I see it in my own work as a copywriter. There are some clients who I just click with. I get where they are coming from, they like my style, it’s easy to ask questions and make recommendations and as a result they are happy and I feel good.
In comparison, there are some people I’ve only worked with once. we weren’t a good match and although I did the work it made me feel stressed and it took a lot longer. The truth is you can’t please everyone (and you shouldn’t try).
Free up your time
Once you’ve lost some of those unprofitable customers, it’s time to get really clear on who your ideal customer is.
You see that’s the secret to attracting customers who will pay you more.
You have to know, in detail, and intimately who you want to work with. And getting to this point takes time and is hard work.
However the payoff is enormous. You see if your advertising is tightly focused to attract exactly the sort of person you want to work with, you’ll:
- Attract the right sort of person (obviously!)
- BUT you’ll also deter the people you’d rather not
It’s a simple principle but tricky to implement in practice, which is why so many businesses don’t bother.
Instead they focus on the obvious, generic, easy to do forms of advertising which appeal to just about everyone who may possibly be interested in their business. And because they don’t know enough about what their target customer are really looking for, they focus on the most obvious eye catcher – low price!
Instead use the time you’ve saved in losing unprofitable customers figuring out how you are going to attract more of the type of people who currently fall within your 20%.
Get up close and personal
To do this you need to create a customer avatar for your business.
A customer avatar is marketing lingo for a description of your best / ideal customer. And to create one, you simply need to answer these questions:
Start with these simple demographics to narrow down your target:
- Male or female
Then dig down (this will require some deeper thinking, thought and research):
- What does he (or she) read?
- Which social media platforms are they active on?
- What kind of things do they like and dislike?
- What are their big goals and personal dreams?
- What keeps him up at night?
- How does he make decisions?
Finally write a one-page bio based on your answers, give your avatar a name, and bring him to life with a photo. Then position this close to your workstation as a constant reminder of who you want to work with.
Hone your message and advertising to exactly this person
The final step is to say farewell to generic, vanilla, boring marketing.
Instead allow your creativity to figure out how to get the person you’ve described in your avatar to contact you.
To do this you’ll need to understand your customer’s pain and hone your message to convince them you’re the one they want. This is far more effective than offering a low price and because your focus is on adding value to a specific group of people, they’ll be willing to pay you more.
It takes confidence
Most of the competitors in your industry will not operate like this.
And it takes confidence and self belief to put a higher price (and therefore value) on what you provide your customer base.
However I don’t think you started your micro business just for an income. You didn’t just want to make ends meet. Instead you wanted to carve out a reputation. You wanted the freedom and flexibility to work around your kids and you wanted to generate wealth to fulfil your personal dreams.
So why not take a risk? Why not think that much bigger and carve out a niche (based around your customer avatar) where you become “the one to go to”.
Now what would you micro business (and your lifestyle) look like if you achieved just that.
I reckon that outcome is worth more than a fleeting thought – what about you?
Today’s Micro Action
Plan in some focused time where you will focus on devising your strategy to attract higher paying customers to your micro business. First get clear on your 20%. Next hone your customer avatar and finally create a marketing strategy to attract the right people to your door. And finally, reassess your price based on the value you offer. Good luck.