You probably hear from prospects on a budget who can’t afford your core services. Instead of turning them away, what if there was a way to help them profitably—and turn some of them into big customers?
You may be able to offer cheaper services to prospects on a smaller budget, but you need to be strategic about it.
If you’ve tried offering cheaper services before and it didn’t work, I’ve identified a few ways you can improve your chances of success this time.
The key is to manage expectations about client service and deliverables—in this model, you’re selling “McDonald’s at McDonald’s prices,” not “fine dining at McDonald’s prices.”
Why you’re struggling with this now
Many agencies suffer from what I call the client dilution problem — wasting time servicing tiny clients who demand more attention than their budget allows for. Have you ever tried offering cheaper options and it didn’t work? It probably didn’t work because you didn’t reduce the level of service to reflect the lower prices. You can serve small customers profitably if you’re strategic – if you structure things right from the start. Offering cheaper options can be a great way to build your sales funnel — sell people small projects or packages, then move at least some of them to higher-priced work.
How I do smaller-scale work profitably
I enjoy helping clients through large-scale consulting projects because they typically see between $100,000-$500,000 in potential annual results. But I know that for many agencies this is a high consulting investment. That’s why I offer two options with less commitment: executive coaching and daily agency consulting. Coaching and consulting by the hour are still profitable, although they are priced cheaper than large consulting projects. For coaching, I started charging an onboarding fee in the first month to cover the additional components during this onboarding process (analyzing each client’s individual onboarding questionnaire, conducting a DiSC assessment, and creating a customized coaching roadmap)
How to make this work at your agency
Offering lower-priced options doesn’t work unless you’re strategic about it. Here how to make this work for your agency.
- Decide whether to highlight or downplay the lower-priced options in your marketing. You don’t want to cannibalize your higher-end services, but you also don’t want to scare away otherwise good prospects who might prefer to start small (and then spend more later).
- Manage your sales costs. Focus on “fast failure” here—you can’t afford to invest 20 hours of sales time on someone who’s going to buy a $500 something-or-other. Refer people to the lower-priced service as soon as it’s clear they’re not a match for your usual higher-priced options.
- Manage expectations about quality, including client service. Your lower-priced services likely need to be at a lower level of quality. That’s not to say they should be bad, but people need to understand they won’t get the same level of client service attention as higher-priced services. For instance, they might get email support but not live support, or the deliverable is a phone call with advice instead of an in-depth written plan. This can create upsell risks (e.g., people won’t upgrade because they don’t realize your higher-priced services include more) but you can mitigate that.
- Streamline the delivery process, including delivery costs. Manage budgets closely. Going two hours over on a 500-hour project is tiny. Going two hours over on a three-hour project is huge. Automate as much as you can. Consider putting lower-priced clients into a different client service process—for instance, using a “trouble ticket” system instead of having a dedicated account manager.
I recently spoke with a new client whose agency offers a $90/month service that includes hosting and WordPress plugin updates. Overall, most agencies shouldn’t offer hosting—because they lack the technical expertise and support infrastructure to do it profitably—but his agency has it down. Because he closely manages sales and delivery costs—and client expectations—he’s created a great source of recurring revenue.
Caveat: If you have small-budget clients who demand big-budget service, you need to reset their expectations or fire them.
Question: What do you do when small-budget clients can’t afford your core services?