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Expenses or Investments?

How to Change Our Approach to Pricing

I recently read a blog post by someone I admire and follow religiously, Tim Williams, regarding how important our language is when discussing our services with a potential client. In this post, Tim provides guidance on how professional service firms can change the language used to communicate with clients, and lead a change within the firm itself. Here’s the link to the post:

I've recently begun to see this sentiment mirrored by the gym I go to each weekend. This past Sunday I saw a sign which stated that my monthly gym membership wasn't an expense, but an investment in my health. I kind of like that sentiment. It makes me feel less squeamish about spending the money. It also makes me feel more "serious" about what I'm doing with my money. I'm not just paying another monthly subscription; I'm making an investment in my overall well-being.

When you speak to your clients, existing or potential, how do you speak about your services? If you're selling time, it's hard to frame what you're offering as an investment. I can't think of many things I pay for by the hour that take the form of an investment. But if you're selling a solution or a feeling, can you reframe that expenditure by your client as an investment in their business? I think you can, but you have to change your language. Why could this be beneficial to you?

  • Investments lead one to think that the expenditure will produce future benefits - When you "invest" in something, you are expecting to be the recipient of a "gain," correct? You don't buy stock in Apple because you like the logo. You want to be able to sell that stock for a gain or hold onto it and build your personal wealth. When you provide a solution or feeling of wellbeing (peace of mind, for instance) for your client, you want them to feel they will gain a future benefit.
  • Investments are not the same as expenses - Expenses are those pesky cash-suckers that come along each month and deplete your bank account, such as rent and utilities. But you'd never consider those items to be investments. I think you can easily distinguish your services/solutions from the regular overhead that your clients experience on a monthly basis.
  • Investments are not made grudgingly - I have never once grudgingly made an investment in my retirement account. I am happy and proud when that monthly draft happens! I feel like I'm on my way to something better. But when I pay my car payment, and know that the value of my car is likely dropping faster than the loan balance, I don't feel so good about making the payment. You want your clients to happily make investments each month in the high-value services and solutions you provide. For them to feel that way, however, you have to be providing the true value in which you're asking them to invest. You can't allow them to place you on the same level as their car payment.

We changed our language from "cost" and "price" to "investment" a while back, and I've only had a few people comment on it. Maybe it didn't catch their ear, maybe it did and no one commented.... but either way, I feel differently when asking a client to "invest" in our services. I did actually refer to a service our firm was investing in as such to the provider, and he thanked me for saying it. I used the term because it most accurately reflected how I felt my money was being used. There's a huge difference, isn't there? Tim Williams shows us many more ways in which we can change our language in that blog post, so take a look at it when you can. It’s enlightening to say the least.

How will you ask your clients and customers to interact with you next time? Are you just an expense to them, or are you an investment in their success? I think you know which one you want to be.

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