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Monday, January 29, 2007

Price Sensitivity: What's the Best Position for Your Clients?

What is price sensitivity? The term basically describes the extent to which a buyer uses the price as a reason to buy a service or product. As a computer consultant, you want to get clients that have very low price sensitivity. A client with low price sensitivity will pay you what you charge because they want you to do the work.

Benefits of Obtaining Clients with Low Price Sensitivity

1. You can choose the best quality clients because they will pay your rates no matter what they are.

2. You will be able to set rates at the high end of a range and still get low price sensitivity clients.

3. Low price sensitivity clients are usually serious about needs and will let you build their systems with greater freedom.

You need to base your marketing decisions on price sensitivity in order to get the best clients. When you are sure those falling into your sweet spot have low price sensitivity and vice versa, you can make the appropriate decisions about marketing and sales.

High Price Sensitivity Clients

If you direct your business towards clients with high price sensitivity your rates will have to be low. While this might work for some computer services businesses, high prices are always preferable.

Clients in micro businesses and home-based businesses are typically those that will have high price sensitivity. If you want to work with this type of client, then you will have to try to get a very high volume of customers.

Charging Premium Rates by Focusing on Price Sensitivity

In order to set the highest rates for your services, you have to focus on clients that have low price sensitivity. Regardless of what you choose to do with your business, you have to think about price sensitivity when creating a sales and marketing plan. Keep in mind that high rates often equate to higher quality in clients’ minds. Therefore a majority of clients will choose you based on price.

Blogged By: Computer Consulting 101 Professional Kit