Typically, people who sell services go for an hourly rate. They use a process called “reverse competition” to determine what their rate should be. This is where you take a look at what your geographical competitors are charging, and you decide where in range you want to fit on spectrum of hourly rates. Inevitably, we choose a rate somewhere in middle, so we can say that we’re not most expensive, but neither are we cheapest!

What kind of message are we sending out to our clients with this approach?

We’re showing absolutely no differentiation from any other company – just sticking ourselves straight down line. In other words, we compete with everyone! Not a very prudent marketing decision.

So pricing simply using an hourly rate that sits in middle of spectrum is, in my view, a wasted opportunity to create a point of difference with your offering. Let’s think more broadly for a minute about what we are actually offering to your clients.

Regardless of what our specific offering is, we all offer some combination of: ·Quality ·Price and ·Service

QUALITY

Quality has become an expectation - minimum you need to be in game. It is similar to a high school degree - no one cares if you have one, but watch out if you do not. Quality is no longer an effective differentiator. So if you are going on about exceptional quality of your service in your promotional material and sales pitch, just realize that in your customers eyes, you are not differentiating yourself in any way.

After all, no sane company is going to advertise fact that work they do is of average or low quality. It’s all high, isn’t it?

PRICE

There is absolutely nothing positive about competing on price, unless you specifically position yourself as a low-cost provider. Certainly, there is a market for discount provider, but I believe this only works if you have a very high volume of transactions. As a service provider, only sensible route is to obtain premium prices for your services.

No matter what you charge, there is always someone, somewhere, willing to perform work you do for less money. Customers are value conscious, not price conscious. They look to do business with people they feel give them more than they are paying for. So goal for service provider is to make sure customer perceives full value of service, not simply price component.

Its accepted fact that many customers will equate high price with high value - especially when there is very little else to judge your value on.

Wise consultants know that if they price their services at low end of market, customers do not take their advice seriously. On other hand, if you charge rates on upper end of spectrum, customer will hang on every word you say and has a higher probability of implementing your suggestions. This of course has a proviso that you are offering a great service, rather than a mediocre one.

Sometimes biggest hurdle to get over when considering charging premium pricing is our own attitude. Do any of these sound familiar?

‘I can’t charge those prices – my customers will all walk away!’ ‘My service isn’t worth that much’

Welcome to first part of a two part series about getting into investment property business.

After riding ups and downs of stock market roller coaster for a while, an increasing number of investors are looking into property investment as a more stable alternative. With hot markets in many parts of United States, time may be ripe for you to get into this potentially lucrative trade. I would suggest, however, that you keep reading before you jump on first property you find. You just might find something in this article that will keep you from breaking bank and your back.

The hope of any investor is to build long-term wealth; this is a fairly straightforward principle and probably reason you're reading this article. There are however, some rules to play by in property investment game if you don't want to end up taking a shotgun with you every time rent needs to be collected. I'm talking about how to avoid becoming a 'slumlord'.

In order to best relate rules of being a successful landlord, let me share a story experienced by some extended family members. It's a great example of what NOT to do if you want to get most out of your investment property. After story we'll see what rules and lessons we can learn. Names have been changed to protect identity of innocent.

Ben bought a beater single-family investment property in a very bad area and he his two sons, Josh and Nathan, all got busy. They put in hardwood floors-don't want to have to replace carpet every time you have turn over, right? And then they thought they'd use really good paint-don't want have to repaint every time, right? And then they decided to splurge on good cabinetry and bathroom fixtures-a happy renter is a good renter, right? And to top it off, they put in nice towels on nice racks that said, "We are Family." Renters would appreciate that, right?

Right.

It only took eight months to get them out of house; turns out that tenant rights as outlined by county enumerate more rights than rest of us enjoy collectively. As family moved out he noticed that mom and two older boys all sported matching shirts stitched with "We are Family." The rest carried various pieces of house.

Ben, Josh, and Nathan began to rebuild house, finding all sorts of interesting changes to its structure. Nothing really serious other than a supporting beam was chain-sawed out (apparently more firewood), tile pried up in one bathroom-no clear reason why, gang signs scratched into all glass and mirrors that weren't broken and other little surprises.