When offering advice, there’s only one sure way to consistently ‘beat’ a competitor’s pricing…
Offer more value.
Advice clients don’t want your products, they don’t even want your advice. They just want their outcomes.
Your advice is a means to an ends, that’s all.
To advice clients your products are simply the means to an ends for them to better achieve the outcomes that are important to them. It follows, doesn’t it, that to best compete against the inevitable cheaper offerings from competitors, the best way to differentiate your offering is in the value you are offering?
In all times, and in particular these uncertain times, the best advisers (like Troy MacMillan – The 2011 AFA Adviser and Principal of The Wealth Designers) don’t position their value on the ‘cheapness’ of their offerings, nor on the years of experience they have in establishing self-managed super funds, nor on the awards they’ve won, nor insurance product with simplified medical underwriting, nor on their transparent retainer job pricing. No, to advisers like Troy, these are all just tickets to the game.
When advisers like Troy articulates his value, he does it in terms that the client values.
In a session with Troy yesterday he shared the story of a client who recently became a private client that just wanted to quickly move into a new job to erase the tough recent memories of a tragic accident, who in early 2012 wants to know how he’s going to fund and find a balance between his remaining family (three grown-up daughters) scattered from Western Australia’s booming north, Sydney’s eastern suburbs and New Zealand, and who also wants to keep interest in his 30 year career but with more financial freedoms than ever before.
Expressed this way, Troy knows what value is in this new client’s world. Troy’s job is the maximise the probability of his client achieving the details that are important to him.
Troy and his new client (and all his advice clients) believe the same thing about the value being added. The value being added is the client’s desired detailed outcomes.
Using cost-effective tools, platforms, products (if required), outside experts, processes, procedures are all just tickets to the game – they aren’t Troy’s differentiators. Troy’s differentiator is the clarity that he and everyone on the Wealth Designers Team understand about the value they are attempting to add. Troy and his team know the detail of each of their advice client outcomes even better than some of their clients and just as well as the details in the client bank accounts, superannuation balance, estate structures, loan statement, trust deeds etc.
Troy hasn’t lost an advice client on price that he didn’t want to lose during GFC #1 and GFC #2 (i.e. nearly four years) and at the same time he’s increasing his pricing just to control demand for his services.
If you’re thinking that you have to reduce your price to beat your competitor’s price, you’ve already lost.
Never reduce your price, always re-position your value.
What do you think?