11. Will You Suck Up the Dregs or Cater to the Top?
Here’s a novel idea: Your choice as a business owner is whom you’re going to serve.
Most of your competitors will take any business they can get. But catering for the masses means you’re going to suck up the dregs whether you intend to or not unless you take it upon yourself specifically to cater only to the top end.
And the top-end has the wherewithal to pay, if they see the value in what you are offering.
And that is when price does not even come into the equation and you can charge what you like.
Price is incredibly elastic, and we are all guilty of under-pricing.
I learnt this years ago when I was working as a manager for the corporate arm of a large Antipodean travel company. I had a portfolio of business clients and essentially my job was to book their travel for them.
Now back in the day agents who sold travel would get quite good (10-12%) commissions from airlines or hotels for selling their flights or rooms, and if you worked at a large travel company you might also have access to negotiated prices that weren’t available to the public.
These ‘net fares’ were used to sell the same flight or hotel to a client but you could choose your own commission to put on top. The trick was to establish a relationship with the client so they depended on you for everything, every change to a flight time, every room upgrade, even to the one who insisted on a hotel in each country he visited that had an ATM within 10 metres from the hotel and a gym with the correct weights in it.
Because then I could add some pretty exceptional commissions to the fares and they wouldn’t bat an eyelid, have a fit or raise a query.
And it wasn’t just £50 here or there, the biggest commission I made on one booking was £10,800 for just six flights around Asia.
And the only reason I made that commission was because I had put £5,000 on the client’s previous booking and they didn’t squeak.
You may think that is unethical but a) I don’t really care, and b) the client was getting value. He had my personal mobile number so he could ring me any time of the day or night to make instant changes to his bookings, something that was a priority for him.
As I said before, prices are incredibly elastic, there is no such thing as ‘the going rate’.
Premium prices infer a higher quality product or service.
When you compare a £25 haircut with a £250 haircut, you are not going to expect much with the former and a damn good night out with the latter.
And how do you know how much to charge? Well you are going to have to test it, but when you couple premium pricing with my next article on premier positioning you will pinch yourself.
P.S. Back to madam being sacked. Yep – we told her, very nicely, we were probably not the right salon for her anymore as we clearly could not meet any of her expectations.
She was a bit shocked at first; I don’t think she had been sacked by anyone before. But she eventually got it and we didn’t see her again.
Which is a good thing, trust me.
Life is too short to be dealing with that kind of misery all of the time. But what this story also demonstrates very nicely is the notion of Premier Positioning, or ‘your business, your rules’.
P.P.S. If you can’t wait for the next article and want to know more, get your FREE copy of my book Grow Your Salon FAST here.
Just enter the code GSGVIP when prompted. You will have to invest in post and packaging so I know you are committed to reading it.
But don’t worry, your money is safe with my 100% Money-Back Guarantee.
You’ll also get my daily emails with much more information and a chance to invest in more products that will get your salon making more profits.
Click here to find out more.