Why Low Prices Don’t Attract Clients (and how to set prices that do)

Once upon a time there was a little girl named Goldilocks, who went for a walk in the forest. She came upon a neon sign flashing the words: Cheap Eats. And so she followed the sign to a little cabin where she discovered that no one was home…

Say what? You know that Goldilocks didn’t need the promise of low prices to find the home of the three bears, and your customers don’t need one to find you.

There are all kinds of reasons why accidental entrepreneurs tend to offer low prices. One of the most common is to attract business.

The thinking goes something like this.

I don’t want to shout from the rooftops, i.e., I’m not the flashing sign type. I don’t believe in making extravagant claims. I just want to do good work for people who will appreciate it.

So I keep my prices low so that people can afford it. I need to make sure that my prices don’t keep anyone away.

But what actually happens? Are low prices bringing people in?

How Low Prices Work (or Don’t) to Bring in Business
From the Internet to the daily newspaper, we are bombarded with ads offering low, low prices. It’s natural to conclude that one way to attract business is to keep your prices low.

But what we’re overlooking is that, most of the time, low prices get our attention because of the flashing neon sign. Without the neon sign, how can we know that Mary’s prices are better than Joe’s?

Think about the last time you bought something because the price was low. How did you know?

Was it a newspaper ad? Something you heard on the radio? A special offer? Perhaps a friend passed the word. Most of the time we react to low prices because some company paid big bucks to get the word out.

But if you price your work low precisely because you can’t pay big bucks (or wouldn’t make so much noise even if you could), how is anyone to know that your work is such a bargain?

Low Prices and a Low Profile Don’t Work
If you are counting on low prices to bring in clients (or to remove the obstacles that keep people from hiring you), you need to have a pretty high profile.

And if you’re not the type to put up a neon sign, that’s a problem.

When you prefer a naturally low profile, low prices are more likely to keep people away than bring them in.

How Low Prices Affect You, Really
In the marketplace, there is a strong association between price and value. We naturally assume that more expensive things are worth more and less expensive things are worth less.

And when you or I offer our work at low prices and still don’t get work, how do we feel?

Like we’re not very valuable. Like no one is interested. (If they were, wouldn’t they be flocking to our door to take advantage of the great deal we offer?)

And the less valuable we feel, the less we are inclined to show up or to take up space when we do.

The result? When we rely on low prices to attract business, a low profile becomes no profile at all.

You can get clients without shouting from the rooftops, but not if your strategy leaves you feeling like road kill.

Finding Your Just-Right Price
Believe it or not, there is a price that will work for you, one that will help you attract business without neon signs and that will foster the kinds of relationships you want to have with your customers and clients.

Here’s how.

Three components of right-pricing.

1.    The right price begins with the body.

Our bodies are faithful recorders of our thoughts and emotions. The worries, dreams, and beliefs that have, until now, controlled your experience of setting prices are encoded in your body.

So step one is to create a safe, peaceful, resourceful state so that you can take a fresh look at this matter of prices.

The point is not to get artificially hyped up. What we’re after is peace, not frenzy or fakery. When you’re at peace, it’s easy to recognize what a right price feels like.

2.    The right price builds reciprocity.

When your prices fit just-right, you are able to care for your clients and customers in a healthy way. There’s a reciprocity that goes beyond keeping score. Unlike a taxi ride where the meter is always running, the right price frees you and your clients or customers to concentrate on the value rather than the cost.


3.    The right price fuels creativity.

Pricing to break even is not natural. You can prove this to yourself by looking at Nature herself. What plant produces only enough seed to replace itself?

In nature and in business, the creative process requires what looks like excess but is actually the juice that fuels birth, rebirth, and change. When your prices are too low, you don’t have the necessary luxury of time to reflect, renew, and discover new things that will bless your clients and yourself.


Like Goldilocks, but Different
Goldilocks was a master of what fit just-right. But Goldilocks was a self-absorbed girl in a fairy tale. It’s all very well for her that she got her way, but you’re a grown up and this is not a fairy tale. Can a Goldilocks Strategy work for you?

Yes and no.

Goldilocks can teach us the value of trying this, that, and the other thing until we find what fits just-right. But we have an advantage Goldilocks did not: We get to cook the porridge, build the chair, make the bed.

It’s more work, but it’s our work. Right-pricing, like everything else in business, is both a process of self-development and a skill we need to make a living.

So a Goldilocks Strategy can work and work well, provided we remember that we’re writing the story ourselves.

How about it? Does your business need a flashing sign or a new pricing strategy?