May 20, 2011 5:27 pm
"When this happens it is a slow death by a thousand drips," comments Jason Marrs, price strategist and co-author of No B.S. Price Strategy with Dan S. Kennedy. "I say drips because a price that is too low is a reflection of something called a value leak. Like a slow leak in your house can go unnoticed for years, all the while causing profound structural damage, so too can a value leak in your business."
So what causes value leaks? Marrs answers that value leaks happen when you fail to recognize and collect on value that you are providing to your customers, clients or patients.
To put it another way, if you are not being compensated for your processing and shipping being faster than your competition—you have a value leak. If your waiting room is more spacious and cleaner than the competition, that is something of value. If you're not being compensated for it, it's a value leak. The list goes on and on.
Every business has value leaks. The question isn't if you have value leaks the question is how many and how severe.
Everything you add to your offering—be that service, quality, experience or something else –adds to the value being received by your customer. These value points also add to your costs of doing business.
"Value points must be recognized, accounted for, assessed and figured into your price," notes Marrs. "This will give you the ability to differentiate your offering from the competition, raise your price and produce more profit. That extra profit will then give you the ability to improve your offering, your service and your security."
Jason Marrs is a pricing strategist who coaches entrepreneurs and other professionals in overcoming price reluctance and resistance.