In the absence of a clear and compelling value proposition for a customer, planners will often struggle to obtain buy-in from prospective new clients.
We name what seems to be an expensive fee, and in return we try to convince them of how magical – or predictable – our process is, and promise that we will also love them forever more if they do indeed become a client. We then wonder why we meet price resistance.
In my previous post I discussed one way of remedying that: we must position what we do in such a way that it is immediately understandable, and desirable. If we get that right the value becomes immediately apparent to the client, and as a consequence there is no significant price resistance. Who regrets getting good value?
Some planners and advisers do however believe so strongly in the proprietary process, or the comprehensive planning service that they see it IS the value for clients. Of course, they may well be quite right. However, describing a process which is essentially technical in nature and somewhat mysterious to the average consumer, and then asking the consumer to “trust the process enough to pay for it in advance” is a challenge. The consumers do generally feel that they are paying in advance, even if our invoice is not presented until after they have received the plan, because the plan itself has not proven its worth until they have followed the recommendations and allowed the requisite time to pass to see the results.
If one is wedded to the process and wishes to make that the core of the value proposition and simultaneously minimise price resistance, then an excellent strategy is to break it down and sell the components. Don’t sell the entire comprehensive planning process at one relatively large fee. Sell it in instalments at modest and affordable feels.
To illustrate let’s use just a couple of examples of the very front end of Financial Planning….the most boring (yet potentially most important) parts for most consumers: cash management and debt management.
I would guess that a lot more potential future clients would be interested in these services, rather than “financial planning”:
- “Show Me The Money”service: for a flat fee of $400 (for example) we can figure out how to find spare money from your household income, to help fund the holiday you want or buy the next toy…or whatever drives you.
- “Freehold Home Owner” service: for a flat fee of $400 (for example) we will figure out the way for you to pay less in interest on your home loan (which is usually many many thousands of dollars!) and own it faster
- “Peace Of Mind” Plan: for a flat fee of $400 (for example) we will work out how you can get rid of debts as quickly as possible, and get the majority of financial stress out of your life
This is just a couple of quick and easy examples to make the point: We are usually dealing with people who have a particular hunger now, and they want it fixed quickly and easily. They want to grab something from the drive-through window at a fast food joint, and we talk to them about a 7 course degustation dinner which we promise will be a life-changing experience for them. They want fast food and we are often talking about fine dining. The result? We struggle to get engagement.
Break the skills and services down into digestible chunks for them, and put it in language which links the service to the outcome that you help them achieve.
You won’t find any serious price resistance then.
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