Darnyelle A. Jervey, a business coach, tells small entrepreneurs they are probably not charging enough for their services.
Speaking to a group at the New Castle County Chamber of Commerce last week, Jervey said price is not important to a consumer if a product is the solution to his problem.
Pointing to a bottle of water, she said it costs $1 at the Dollar Store, more at Bob Carpenter Center and even more at a Philadelphia stadium, but people buy it because they want it to quench their thirst.
“It doesn’t matter how much you solution costs,” she said. “For those of us who price our services for less than it costs us to deliver it, we are doing ourselves a disservice.”
Jervey said successful entrepreneurs have products that fix the things that keep consumers up at night — sex, fulfillment, money, career or health, she said.
“Profit is how we keep score in business,” Jervey. “Do whatever you need to do to get confident enough to believe that whatever you bring to the table is the best thing since pockets. Let customer see the value.”
A former MBNA staffer, Jervey used the bank as an example of a successful business that charged more than some competitors: “We did not have the lowest interest rate. They taught us well to say, ‘We offer a fair product at a fair price.’ We were not the cheapest kids on the block, but they believed they could get people to pay them more by offering a better product with better service.”
More than 89 percent of small businesses do not make $100,000 a year, Jervey said. “This bothers me,” she said. “We’re so afraid that, if we tell them what it’s really going to cost in order ot perform the job with excellence, they’re going to say no. If they won’t buy, they’re not your ideal client. If you’re not making $100,000 a year you’re not a business yet.”
Jervey said an owner must cover his direct costs such as onboarding a new customer plus his general and administrative costs, his overhead and his targeted profit.
“We’re all in the business of marketing and selling whatever our solution is to the problems people have. Marketing is the foreplay and sales is the deed,” she said, laughing.
Jervey’s other tips for small business owners:
• Put your web efforts into the unseen search engine optimization rather than flashy graphics. “The most important part is that your back end gets people to see your front end,” she said. “If you can’t get found, you can’t get paid,” she said.
• If you’re writing a blog post or writing an email, write it as if you are addressing just one person. Jervey says that will make it “not so sales-y.”
• Don’t get hung up on Facebook and online: Facebook gets a .71 percent customer response, that banner ad online might return 1 to 3 percent, she said, but old-fashioned, face-to-face sales gets an average response of 20 percent or higher. ♦