Several months ago, I was at a Chamber of Commerce breakfast. The presenter asked the crowd how a business owner should go about pricing services besides looking at the prices of competitors. No one said anything, and since I’ve never even thought about what my competitors charge, I said, “Well, if someone agrees to pay what I ask without qualms, I raise the price just a little bit for the next person. If that person agrees, I raise it just a little bit more for the next person, and then just a liiiiittle bit more for the next one and so on. No one has argued with me about price yet…”
Everyone laughed – except the presenter, who said, “You’re all laughing, but she’s right. You just keep raising it until somebody says no. Then you tell them you made a small mistake in estimating, and quote them the price you quoted the last time.”
In other words, you keep going until you’ve gone one step too far, then you back up.
It worked well for me. I’m now confident that my services are well worth what I charge. It took quite a long time for me to feel I had reached a good, stable pricing structure, but approaching it slowly allowed me to gain confidence.
I do this with all kinds of things. We have pets. Lots of pets. Two birds, four dogs. We have also had frogs, pigs, cats, fish and lizards. It seems like there is always room for one more critter. Until there’s not. It’s obvious when we have gone one step too far with our menagerie, but not quite so easy to back up.
A couple of days ago, I went for a run first thing in the morning. It was HOT. Since I haven’t been running regularly for a while, I kept having to walk for a few steps, then run some more. I kept doing this until I could feel my hamstrings shaking. Several hours later, the evil heat exhaustion headache made its ugly appearance. One step too far.
Taking things just a little too far is a good way to find your boundaries, so that you can push them. It is probably the best growth strategy for cautious people because you are constantly testing the waters and rarely diving in. There’s not much danger involved because you go forward about an inch at a time, and it’s perfect for people who like to take small steps.
There are dangers, of course, and alternative methods of progression. Peter Shallard wrote a great post about the difference in the tortoise and the phoenix methods of transformation. Peter recommends getting comfortable with both types of change, and makes good points in favor of that recommendation. It’s possible that, by pushing your boundaries slowly, you miss out on opportunities. There’s no telling how much money I “left on the table” in those early months of business.
It’s not a good strategy to use in relationships. You generally don’t want to go a step too far with people. Sometimes it’s not possible to back up.
Do you ever purposely go a step too far to see what will happen? How do you handle it when you have to back up?