Preparing for your least fave FAQ.
Photo by Cameron Clark
When a potential client asks why you are priced so much higher (or less) than a competitor, the initial impulse is to compare everything you offer – line by line – to everything the competition offers.
While this may sometimes work, it is often a fool’s errand, as it immediately commoditizes the services you provide.
The simple fact is that you most likely don’t know why your competitors are priced the way they are.
Maybe they have a spouse providing for all of the family expenses, so they can afford to take a loss on projects as they build a brand name.
Maybe their only annual sales goal is to cover private school tuition for their kids.
Maybe they dropped out of law school and still have six-figures of student loan debt to repay.
Maybe they are motivated by the social signal of having the Louis Vuitton or Céline logo on their accessories.
Maybe they want to provide scholarships to Ivy League universities for foster kids.
Maybe they chose their price based on outdated advice given at an industry association meeting.
Maybe they are driven by ego, a need to be liked, or FOMO and will emotionally price projects at a lower rate in order to never lose a gig.
Maybe they don't understand luxury strategy and their price is only based on the equation of cost of goods + time.
Maybe they have higher overhead.
Maybe they have lower overhead.
Maybe they just picked their numbers out of the air.
You don’t know. So why not just say so?
Why are you $15,000 when Sally Anne Events is $5,000?
"I’m not involved in creating Sally’s business strategy, so I don’t know why she is priced the way she is. I am confident in what we offer and the experience and expertise we bring to the table and our pricing reflects that."
Maybe you expand on this explanation. Maybe you don’t.
Whatever you do, never knock the competition. The wedding industry may be large, but it is like a small town in that whatever you say will get back to them. It will always get back to them.
More importantly, you may need to collaborate with them in the future. If you’re competing on the level you want to be, then your competitors are most likely also good at what they do.
Stay up on what the industry and what your competitors are doing, but don’t allow it to change anything without deeply considering your own goals and strategies behind it. A knee-jerk reaction to a price difference doesn’t do you any favors in the long-term.
Originally published June 2016
