Razor Blades, Pricing, and Your Practice
October 14, 2022
A group of engineers at MIT just released findings on how human hair, despite being 50 times softer, damages and deforms razor blades. In certain circumstances, these researchers report, a single strand of hair can chip the edge of a blade.
Once the blade receives its first crack, it becomes more vulnerable to further chipping. The destructive cracks accumulate around that initial chip, and the edge of the razor dulls.
One of the more frequent questions I get from professional services practitioners as they open the doors of their new practice is “should I discount my services to build my business?” The answer is not just “no.” It’s “no, and please don’t ever let that idea roll around in your head again.”
Your practice is like that razor blade. Discounting your services may seem harmless in the very short run, but it injures in ways you can’t detect. It damages your brand, as your price is a marketing signal. Based on how you set your pricing, the signal it sends can be one of inferiority. (It works the other way, too: your pricing can exude signals of quality.)
You may think you can discount here and there, and clients won’t compare notes. You’re wrong. Clients find out, and word gets around about whether you’re a “cheap provider” or not.
Once you start discounting, it can be hard to stop. That first nick to the blade makes it much easier for further damage to accumulate. You justify a discount for your 20th client, for instance, because you handled the previous nineteen the same way.
After a while, your practice becomes a dull blade.
Here’s the good news: just like a razor blade can be changed, you can reorient your practice. If you’re just gone out on your own or are about to open, however, it’s much better to avoid a change of blades caused by poor pricing.
Image created using Craiyon (Formerly DALL-E Mini)
(This blog post was also posted on LinkedIn.)
©Ray Business Advisors, LLC and John Ray
About me: I help solo or small professional services firm owners with the confidence and positioning necessary to improve their pricing and change the trajectory of not only their business but their life.
I have a podcast called The Price and Value Journey, which features interviews with industry leaders and audio versions of my blog posts. You can find the podcast on your favorite podcast app.
I also have a book coming out in 2023: The Price and Value Journey: Raise Your Confidence, Your Value, and Your Prices to Grow Your Business Using The Generosity Mindset.
For more information, go to PriceValueJourney.com