Welcome to the Bottom Line Top Line Podcast with Carol Bartlett, Jol Hunter, and Chris Spurvey.
In this episode, we talk about a framework called Client Analysis—a way you can, at any point in your business journey, analyze your current and potential clients. We also look at client analysis specifically for start-ups, ways to increase customer loyalty, and how to set competitive prices.
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Don’t Take Advantage of Cash Cows
You shouldn’t have cash cows. They’re not sustainable.
I worked with a company that had a great client, earned good revenues from that client, and then, year after year, went to that client with a price increase. When the company acquired the client, the market had taken a dip but that downturn wasn’t considered in the price charged to the client, so the starting price was good. And the subsequent price increases made the account even better. It was a cash cow. Right? No. The moment that they decided to look at their other options in the market, they realized that we were grossly overcharging them for the service. We lost their business, and we lost it forever. There’s no going back from that kind of client experience. That’s the risk you run when you take advantage of a client.
Don’t Set Your Prices Too Low
You may say, “This is a strategic client that I really want to work with. I want to get them in the door, so I’m going to offer them a really low price.” But increasing that price later is difficult.
A better approach is to start the client with a small product or service.
When you’ve shown what you can do for the client, your next offering to them can be of higher value and price.
Be Competitive
Your prices need to be competitive in the market, so setting prices requires delicate balance.
You don’t want your prices to be out of the ballpark relative to the other providers that your clients are considering.
To learn more about these topics, please listen to the episode.
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