June 29, 2018

It’s not much fun dancing in the foyer instead of the ballroom. If you’re dancing in the foyer, it’s not just that you’ve lost the competition—you’re not even in it.

The foyer is that place in the customer’s mind where your product or service is functionally satisfactory. Your features and benefits are just the foyer. If that’s the place you occupy, your price is inadequate and your business might not be nearly as prosperous as it could be, assuming it’s profitable at all.

The ballroom is that place where intangibles reside. It’s that place in the minds of your customers where emotion takes over. If your business is in the ballroom, your bottom line is healthy because your price reflects the emotional value your customers receive from your product or service.

The bakery in a big box grocery retailer occupies the foyer; the sheet cake is just good enough. Gloria Mattei of Nothing Bundt Cakes, however, offers joy with the cakes sold in her store.  Her business is in the ballroom.

We’re also written about chili. Hormel is in the foyer. It’s purely functional and there’s little to no emotion for its customers. Cincinnati-based Skyline Chili occupies the ballroom. For Skyline customers, it’s not just the chili, it’s tradition, memories, and identity.

The problem I often find with B2B service providers such as attorneys, CPAs, and consultants is that they don’t see themselves as subject to the pull of intangibles. In trying to attract and retain clients, they focus on their qualifications.

Part of their thinking is ego, and I don’t mean ego in a necessarily negative way. They think about the pain they went through to achieve those qualifications. An attorney, for example, thinks of their years of education, the degree they received, and the past cases they have successfully resolved. A CPA thinks of their degrees, the effort required to pass the CPA exam, and the continuing education they must have to maintain their certification. These professionals are proud of their accomplishments and justifiably so.

To the customer of a professional services provider, however, these qualifications are just features and benefits. These professional services providers haven’t made it into the ballroom in the minds of their customers, and they can’t understand why their practice isn’t as profitable as it could be.

For the copywriter, this ballroom may be the compliments their clients hear because of the ghostwritten articles they write on behalf of clients. For a business law attorney, it could be the feeling of empowerment they give their clients with the business advice they offer as they prepare and deliver a needed contract. For a leadership coach, the ballroom is the success a client feels as they get better in managing their team.

Professional services providers who are dancing in the ballroom of their customers’ minds have no trouble justifying the fees they charge. They enjoy a thriving, profitable practice.

If you’re a B2B service provider, are you dancing in the foyer or the ballroom?

(Photo credit:  “DSC_2260” by machaon-dance is licensed under CC BY 2.0)

©Ray Business Advisors, LLC and John Ray

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About me:  I’m enthusiastic about how changes in pricing strategy can significantly change profitability for a business and enhance life choices for business owners. I live this passion through Ray Business Advisors, my outside CFO and business advisory practice, in which my pricing is exclusively value-based, not hourly. I work with business owners on how they can change their pricing not just to increase their profits, but better serve the wants of their customers. Click here to learn more or call me at 404-287-2627.