We had some questions come up for a service business that wanted some advice on how to market and price themselves at some trade-shows. This in turn led into a discussion about the correct sales funnel for most businesses. Here’s our two cents below:
Q. Hi Steve, we are a service business that is about to attend two trade shows. How much should we charge for our services?
A. Hi Sam, The most important part of this trip for you is getting new contacts. My suggestion would be that instead of worrying about price, you can offer them something free, so they can see the quality of your service and get used to working with you. It doesn’t have to be a lot, but take a look at each area of the services you deliver and figure out something that is worth or would cost you $50-100 dollars to deliver in each area.
You want to create a sales funnel and start to gain credibility in the mind of your potential customers. Every business has a kind of sales flow which works like this:
1) New potential contacts made. This initial contact can come about from a trade show, a search engine visit to your website, any PR that you do, word of mouth from your existing customers, any type of guerrilla marketing, or advertising. These are now considered prospects.
2) Building understanding and credibility. By giving prospects something
2) Building understanding and credibility. By giving prospects something free causes them to understand what your company does and how it could help them.
2 1/2)- (Optional) – Selling or giving away an inexpensive book, report, video or magazine that is valuable to your prospects. This lets you deliver some value, explain your philosophy and product/service better. Books, magazines, special reports, all are inexpensive to produce and serve to widen your pool of potential prospects.
3) An inexpensive paid service that is relatively little risk for your prospect. You are not trying to make a profit on this paid service but it turns your prospect into a customer and when they are finished with that service they then can get signed up for your larger services. If you’ve done your job right, this new customer will now know you and feel comfortable spending more with your organization.
4) You then deliver the larger services and that is where ALL your profit is made.
Some companies try to just jump from some sales literature in point two to major services in point four, but that doesn’t always work. Conversely, they try to profit from the small services. That doesn’t usually work.
I realize I didn’t really answer your question about pricing but I felt it more important for you to develop contacts and potential customers from this trip and develop a more long term system and strategy that will help you gain more customers. Remember, you will need have some kind of info available about your company. (you can use http://kinkos.com to reproduce your literature and print things in the location where you will be so you don’t have to ship or carry extra pounds around )
These contacts then need to understand you and your company better and do some small, simple, risk free service. After that, you can then really talk business. Now, considering the economy, partnering with them in some way might work, but somehow you have to figure out the labor costs in not just doing the work, but the cost of actually servicing the customer and supervising the project as well. If you can get some kind of competitive intelligence going on so that you know the rates other service businesses are charging, that will definitely help you a lot, but remember that there are always several different markets- Low cost lower quality, middle of the road on both counts, and High End, better quality, more personalized.
All the “mission statements” that are to the effect of The “we want to give our customers the best quality and the best service for the lowest price” are just blowing smoke. Customers know that they need a bang for the buck but that there are always trade-offs of quality vs price. So if you are higher end, say so. If you are lower end say that too. The wrong thing in most instances is to aim at everything, because there is no way that strategy can work in the long run.
I don’t know exactly what your service business is, but I hope this helps.