It seems long ago that opinion polls were still cool on LinkedIn. Back then, I made only one but it was very eye-opening.
Here are the results:
Just to get things straight: if you are an expert, the demand for your services is “inelastic” – which your clients will react less to price changes than expected.
This is good news, as it means less pushback to price raising.
This is also bad news, as it means that your discounts are ineffective.
- Take a look at the poll results. Inelastic demand means that because your clients know they need you, their most probable reaction to a 20% price rise will be a shrug, with maybe a little sigh.
- That does not mean you can get away with it repeatedly, but that’s a topic for another time.
- I spoke with several experts who lowered their price for COVID-related reasons and got basically no result to show for it – just about the same volume of clients, paying them less.
- Inelastic demand works both ways – they react less than you would expect to discounts too.
AND OF COURSE – THE UGLY
Looking at that poll again, a full third of people think that their demand reacts proportionally – a 20% decrease in clients for a 20% increase in price. And that would be a good assumption if they were selling oranges by the ton, or barrels of crude oil. For expert services, it does not work like that at all.