Using Price as a Marketing Tool within your Private Investigations Agency
There are four classic “P’s” to marketing: product, price, place, and promotion. You can find them in any marketing book, or even on Wikipedia; each has a critical role to play in any marketing success story.
Let’s focus for a bit on price.
There has been a lot of discussion lately on one of the private investigator newsgroups about price, how some private investigators are undercutting or underbidding others just to land some jobs and that such efforts are hurting the professionalism of the profession. Some rallied around the concept promoted by one PI who wrote:
“The point that I was making in the original post was about pricing to the public (not sub contract pricing), and how ultra low pricing hurts the industry in general. How can we claim to be seasoned, experienced professionals if we charge so much less than other professions? I was trying to point out that if we don’t take ourselves seriously as a profession, and charge accordingly, then we are not going to be taken seriously by our clients. The profession will suffer as a result.”
Many good points were made on all sides of this discussion. I have spoken at PI conference after PI conference about both the high and low end of pricing, of consciously choosing to be the Lexus or the Chevy of investigators: both a Lexus and a Chevy will get you from point A to point B, but how would you rather get there, which could you rely on better, and how do you position your image.
But my point today concerns pricing as a marketing tool, especially in today’s economy.
Just today I saw advertisements for Arby’s, promoting their classic five roast beef sandwiches for $5. They haven’t done that for years, and just last week they were selling them four for $5. Did they do that as some sort of magic giveaway to anyone who walks in the door….a free fifth sandwich? Or did they do that because $5 is a key price point at which I can also get a footlong sub.? Applebees, Friday’s, even Outback…how many restaurants have $9.99 entrees. Did they all just think of it on their own?
How many people are going into car showrooms to buy a car now? Do they suddenly feel good about the economy, or are they lured by the lowest prices in years and even offers of not having to make payments if they lose their jobs? I’ll bet it’s the prices.
How many people are shopping for houses now, recognizing that they can grab a tremendous bargain, maybe better than ever before? It still may not be good for the home-seller, but the buyer is in the driver’s seat.
Who is going to DisneyWorld because they can get a free ticket or a free meal plan?
“Just hold on, Bob,” you may be saying right now. “You’re talking about food and cars and houses and travel and such, and I’m talking about my professional services. People should be focused on the quality of my services and that demands my fair price. I do quality work, and people shouldn’t care about price.“
Really?
If you are the only person in a region offering reverse fragmatic oculation detection, or some other sort of specialization, and the demand is high, then you can pretty much charge whatever you want. If you are competing for process serving or video surveillance video or the like, then you have to recognize the demands of the market.
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It’s not always going to stay this way. As the economy rebounds, prices will rise on everything (witness gasoline prices already). So you can take the high road in all of this and lower your prices temporarily to select clients by suggesting that you are doing this for them, sort of your own economic stimulus package. You can reinforce your position as the preferred expert, as the PI with more experience, better reports, more personal attention, etc. You can use the economy as a reason to send a personal letter to your best referral sources and assure them that you stand ready to go the extra mile, now more than ever, to meet all of your clients’ needs. But you cannot ignore the price issue, and you must at least be willing to negotiate.
I’ll close with a personal example and an offer for you. You may or may not know that I have sold marketing products over the years, and I have a PI marketing CD that I have sold for as high as $99, with content worth much more than that. Recently I have placed it at $39, a price point attractive to many. Mention this column, and I’ll let you have it for $27. Would you insist on paying $39 or $99 for it? What if only one idea in it could make you hundreds or thousands of dollars, not only this year, but with client loyalty for years to come? Should I insist on selling it for the value it holds for those who use the ideas, or will the CD be more attractive to many PIs now who need help with their business in this economy?
I’m betting the latter.
Price does matter.
Bob Mackowiak has been helping private investigators market their services since 1988. He has spoken about marketing at private investigation conferences from Florida to Alaska, is the author of the classic manual, “How to Market Your Private Investigation Agency,” and helped hundreds of PIs with his COPI Brochure Development System. You can learn more about Bob and his services at www.LetBobHelp.Homestead.com.
Category: Marketing
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Price does matter, but quality matters too. I can’t tell you how many clients I’ve had come to me after paying another private investigator $35 an hour and that PI was unable to come up with any sort of meaningful results at all. Unfortunately, sometimes people just have to experience it for themselves (and waste money in the process) before they understand it.
Price? Yes it matters. However, if you are a novice, don’t expect to charge more than what is reasonable. If you haven’t obtained real-life experiences, familiarization with the investigative process (connecting the dots), or are a recent graduate of some kind of ‘certified’ accredited university or training school, the results you offer your client may reveal more than you would care it to.
I suppose the same holds true for attorney’s. You do get what you pay for, not that all attorney’s are reputable or experts in their fields.
I believe the best example of a company offering professional investigative services is one who can illustrate by the number of years in service. Whether that company has had any complaint’s made against it or any other incidentals.
If you charge a client more than you are able to produce in results, then what makes you think that you can charge higher amounts!?!?!?!
Confidence and thoroughness should go hand-in-hand. You wouldn’t over state a resume just to get a position, because sooner or later it will come back to bite you. You will be asked to perform a task for which you have no experience or ability. Then what are you going to say to your employer? Well, a client is just like an employer and if you can’t produce then your reputation has begun on a spiraling downward slope for which you may never recover.
Find out what other agencies are charging in your particular area on an hourly basis. After doing this, then do some research on that company. This will tell you what your competition is offering in the way of services, especially those that have a ‘history’ (number of years) to show the public.
Start small and work your way up. There are no shortcuts growing a professional services company. Everything takes time and time is all you have!
How you handle the issue of price when first contacted by a prospective client is just as important as the price itself. When other agencies were dying on the vine at the start of the year, we raised our prices because we had to. Our vendor costs and database costs increased dramatically. In some cases they literally doubled. You can’t absorb a 100% increase in costs without passing some of that along to your clients and still be expected to provide quality service.