TLDR?
- Expertise is worth paying for
- Getting more lead sand customers doesn’t always mean your company will grow
- The “pain point” you are feeling may not be the issue that’s holding your growth back
I have a lot of respect for accountants and CFOs. They are great at making sure that the revenue that comes into your company helps you grow optimally. But if you ask them to help you set pricing, they most often create pricing based on income and expenses, and don’t always have a strategy for increasing prices or optimizing revenue per client. And their approach is usually based on numbers and equations, not market research, an assessment of competition, or market saturation.
Marketing Consultants and (fractional) Chief Marketing Officers also help with pricing and pricing strategy, and they approach it form a very different perspective. Additionally, CMOs will have the pricing strategy link directly to the market share goals and overall revenue plan. Different approaches can mean drastically mean different results.
I recently had a client whose accountant/business advisor had advised them on their pricing. The client was relying on his advice for planning across their entire organization. In spite of increased pricing, they were struggling to grow. They reached out to me asking for help with finding more leads and customers. I hear that a lot.
When I was reviewing their business, I discovered that they were in a relatively open market with extremely low competition – as close to a “blue ocean” market as I’ve seen in quite some time. As I dug deeper, I realized that at least some of the inability to bring in new customers was due to a lack of appropriately trained staff. They had no shortage of prospective customers. And the staffing issue was due to their cash flow. They couldn’t afford to hire more people.
They were thinking of adding to their digital marketing budget, which their digital marketing agency had suggested. But instead of simply adding to their digital marketing budget, which they really could not afford to do either, I evaluated the root cause of their issues using my IDEA methodology: Identify, Define, Evaluate, and Act.
By looking for the root cause, I was able to determine that the real issue was artificially low pricing and the wrong pricing strategy. The pricing model they were using set their prices below what the market would bear, and their revenue model was off-target. As a result, they were leaving money on the table.
We fixed the issue and implemented a new pricing and revenue strategy and offering structure. Now more than a year later, I’m delighted to report that the company has achieved higher Average Revenue per Client, longer Client Lifetime and increased Client Lifetime Value. The company is very profitable thanks to their CFO/business advisor, who now calls me anytime one of his clients needs their pricing and revenue strategy looked at.
Is your revenue strategy designed to help you achieve maximum growth? Set up a pricing strategy call, and let’s find out!
