No frills? Or no clue?
There has been a creepy trend among corporate industry in the last decade or so to quote misleadingly undercut pricing in order to grab a sale – and then throw in little fees and extra costs on top in order to grab a quick profit win.
We’ve seen this with some banks, airlines, and various online services. It is a way of presenting a seemingly ‘bare-bones’ price that excludes essentials – and then packing on the bucks when the buyer signs on because those essentials are actually needed. Or just because they are being snarky sneaks.
The industry term is called ‘No-frills’.
In the language of the consumer these are called ‘Hidden fees’.
In advertising this is called ‘bait & switch’.
In Little Big Mouth language, I call these OMFs.
Old-school MBA Fails – though I would love to use two other words there that begin with M and F…
The economy is pretty unstable right now. Imho (which you might have realised is never humble as a Little Big Mouth) we are in this situation because of this old-school MBA mindset of dominating, dividing and charging the world in the name of instant profit gratification. The idea of focusing on longer-term connections and sustainability (yes, that means better profits) has been forgotten.
Which is one of the main reasons why I started Little Big Mouth.
In the spoils of this masculine, old-school business model, many corporations have lost touch with their People: their employees, their customers and their communities.
Those of us who are up against glass ceilings are simply ‘not hire-able’ or face job losses because
we just do not fit into that model this model was never designed for us to begin with.
Luckily, it means that many of us – often out of necessity – have decided to do it our own way. We’ve started up for ourselves.
Big Boy Brands can say they are client-focused in their value statements. But they often struggle to show that they really are, due to everything from their massive size and internal political issues to their hyper-focus on shareholder value.
The world needs us little businesses right now more than ever.
By our very nature, we operate from a more feminine model – one that is about intimate contact with our customers. And authenticity.
At our best, we are not so much fierce competitors but instead we are about confidence and connection. We can work our genuine selves into our brand communications – and trust that this will allow us to have a tight, loyal relationship with that – big enough – valuable tribe of People who best suit who we are and what we have to offer.
The Little Big Mouth Pricing Model
So here is my Top 3 Rules Countdown for how we can authentically and honestly communicate our prices in order to reflect a new model for a new economy.
#3. When you quote a price, be clear about what is and is not included.
For example, it is OK not to quote a price that includes taxes like VAT – just make sure that you are clear that the tax is not included, bonus points if you list the tax percentage.
€99 (excl. 21% VAT)
€99 (excl. shipping)
…and more bonus points if you link to information or a tool where the customer can easily calculate the extra shipping or tax costs.
Added note: Aside form the fact that it is just good practice, in many countries you are REQUIRED to clearly note if your price does or does not include VAT in certain – or even all – situations. Contact your tax adviser or accountant to make sure you know the rules as this could result in major liability.
#2. Offer a clear and friendly list of extra add-ons.
You will help yourself and your customer out by listing the benefits of these add-ons. For example:
“Sometimes you need more support than what is provided in the standard service. I will be happy to help you with the following:
Service A for benefit X: €10 (excl. VAT) per hour
Service B for benefit Y: €20 (excl VAT) one-off charge
Service C for benefit Z: €25 (exl VAT) per month
#1. Charge your worth – and boldly explain why.
As small businesses we often have a tendency to undercharge out of fear. This could be for many reasons – we think we won’t get customers, we want to please or (the worst one) we do not believe in our own value.
- Be realistic about what it costs you in time and materials to produce your service or product.
- Acknowledge what you need to earn to support yourself.
- Add on what you would like to earn to support your business needs.
- Tell yourself that you are offering something very unique to the world that only you can offer because of your knowledge, experience and skills – and put that in your value equation.
- List your price and be clear about why this is your price.
You can achieve this by clearly listing what is included in the price and how it benefits your client, for example:
€99 (excl. VAT) includes:
– A bespoke, researched weekly meal plan plus shopping list that takes your lifestyle and nutrition needs into account – delivered weekly directly to your inbox.
– Access to my recipe library for alternatives.
– Tried, true and tested easy to follow recipes that will save you time and frustration.
– Unlimited email access during working hours to answer your questions.
– Membership to the private online group for inspiration, recommendations, group support and just to share your experience with other participants.
You can also achieve this by telling the story of your work process, for example in a blog post, or on your Facebook page. Make it fun – ‘A Day in the Life’ video is a fantastic way to show your clients exactly what you put into what you give.
Lastly, for some of us service-oriented businesses, our services are not always easy to package up because often they are so bespoke. It is OK not to list a set price as long as you list what your services include – and once you have contact with your potential client, make sure your final quote involves all the above, particularly a clear breakdown of what time and materials you put into the service.
I lied. There is one more rule.
– – -> Be confident. <- – –
You need to be confident, honest and direct about who you are, your business values, your unique mission, your special vision, the real value you offer your People, and your own honest worth…
If you are… well, heck, those People will find you and those people will become your loyal, reliable customers.
And you will see your business grow and prosper at a sustainable pace.
Without having to be an OMF.
Little Big Love,