Twenty percent of your prospects should turn you down for pricing. If you’re in a high-priced market that number would change, but generally speaking 20 percent of your prospects should say ‘no’ to your price. If that’s not happening, your price is too cheap.
I came to Tampa in 2007. For a year and a half, I flew around the country to meet with my clients. Then decided to start a ‘Keep Mark Off The Plane’ campaign and grew my business here. I knew no one in the area, zero people. I knew the guy at the airport, and that’s it.
Here’s how I go into a new marketplace: I start at a certain price that I think will be easily accepted. The market in Tampa is not the same as New York City, not the same as Michigan, not the same as Salt Lake City so I do some research, analyze like services and ask my potential clients via surveys and focus groups. Based on my credentials, I ascertain that someone would be foolish not to hire me for $75 an hour. That’s what I started to do.
My corporate rate is $475 an hour, but since I’m wishing to grow my practice in Tampa, I have a different rate. I tell my clients this: My street price is $475; your price is $75. I don’t want my clients walking around telling everybody they should hire me because I’m $75 an hour. Once I set that price, I watch to see how many people will say no for price. Nobody does, so I just keep moving it up. By the way, I’m still not at 20 percent. I just keep moving it up until 20 percent say no.
There’s a way to test drive and make money while you’re learning. I would love to know that you have deep pockets and can hire a big research company to find out exactly how much you should charge. It’s not necessary. Work begets work, and now you’ve got a way to do it.
What are some strategies (successful or unsuccessful) that you’ve used in the past to break into a new market?