From Neil’s recent post
There is a temptation when you are starting out in business to keep your prices low so you can attract more clients. I tried that for a little while, but quickly learned that those who liked lower prices also liked to complain a lot…especially in the world of consulting.
It’s not worth it.
On the other hand, charging premium prices has these four benefits:
- You appear like an authority – Charging premium prices must mean you are an expert in your field.
- You will get fewer complaints – Companies that have the money to afford you won’t make comments about the amount of money they are paying.
- You deliver excellent customer service – When you are only focusing on a small number of clients, you are able to deliver way better service.
- You’re reputation grows – Your clients will start bragging about you because of the excellent service you deliver.
This is exactly what founder Matthew Wensig of StormPulse figured out. His company had a lot of small paying customers, but changed their focus on big organizations like the White House. This narrowed their customer base but raised their revenue.