How to Offer Reduced Costs for Your Clients

This element of value offers reduced costs for clients.  Reduced costs may be incidental but can attract some clients.

What is It?

Reduced costs are significant but always lag behind making money.  The size of the business determines costs and overheads.  Income is not constrained in the same way.  It’s never easy but in principle you can increase income 10-fold or 100-fold or 1000-fold.  Even if you somehow abolish all costs, you limit savings to the original size of the costs.

What are costs?  They are often divided into costs and overheads.  Overheads are regular and paid whatever the turnover of the business, eg rent or utilities.  Costs increase as business increases, eg raw materials.

Value to the Customer

This is likely to appeal to a customer with a sizeable business and substantial turnover.  A coach working from home is likely to have low overheads.  Heat and light is unlikely to increase significantly, as they would still live there if not in business.  But remember (1) there may be tax advantages to the business and (2) reductions in domestic expenditure may cut drawings on the business.

Common overheads include fees, subscriptions and the like, eg your ISP, mobile phone, website host and subscriptions to online packages.  There may be substantial bills for training and coaching.  These increase as the business develops and the business owner can afford more expensive packages.

Costs increase as the business grows, eg raw materials or products the business uses.  Expenditure on utilities may increase as the business grows.

Finally, there is capital expenditure, occasional expenditure on equipment, eg computers and vehicles.  Buying outright reduces outgoings over time.  If your client flexes payments over months or years, they are likely to pay high interest rates on the loan.

How to Get There

There is a long list of possible costs.  Even reductions in domestic costs may be of value to smaller businesses.

You could offer to look at outgoings and suggest how to make savings.  This works well with packages that help make savings on domestic or business utilities.  Utility Warehouse is one example of this type of offer.

Another possibility, is to bundle together a range of services yourself.  A website designer might offer a package so the website owner does not need to make their own purchases.

And the obvious approach is to provide something cheaper.  Take care!  If you do this so that you receive the income you need for your business all well and good.   If you undercut your competitors you could trigger a race to the bottom, so you end up charging below the rate you need to survive.

Your Offer

Is this offer your main element of value, eg for a distributor for utility warehouse?  If so, be upfront about possible reduced costs.  You may have other lesser elements, eg Utility Warehouse issues one bill for several utilities, thus reducing bureaucracy, leading to a single monthly payment that assists with budgeting.

If reduction of costs is a beneficial side effect of your main offer, then add this element to your marketing lower down the page.  Focus on marketing your main offer and present savings as a benefit of that offer.

This is the twenty-seventh of 31 posts about elements of value.  Make sure you don’t miss any by signing up for the offer below.  The posts in this sequence can be accessed below:

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About the Author

I've been a community development worker since the early 1980s in Tyneside, Teesside and South Yorkshire. I've also worked nationally for the Methodist Church for eight years supporting community projects through the church's grants programme. These days I am developing an online community development practice combining non-directive consultancy, strategic management, participatory methods and development work online and offline. If you're interested contact me for a free consultation.

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How to Make an Offer that Informs Your Clients - Market Together Blog - August 6, 2018 Reply

[…] Makes Money, Reduces Risk, Organises, Integrates, Connects, Reduces Effort, Avoids Hassles, Reduced Costs, Quality, Variety, Sensory Appeal, […]

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