I went to see a prospect the other day (don’t faint) that I had seen a year ago to discuss a CID facility, taking out HSBC. I met the MD and at the time he wanted a big prepayment on what was a difficult receivable and he had a low rate with HSBC that he wanted us to better. He was very price conscious and the “we provide a better service” argument did not win him over.
It shows how times have changed in that he is now only drawing periodically and when he does it is no more than £150,000 on a sales ledger of circa £500,000.
He had received some information on our ICON service and was interested.
During a very positive meeting I mentioned a new service that we were offering – CashFlow Bridge. I emphasized that it was only for profitable companies with good trading experience. He liked the idea of the facility.
However the surprising bit was when I told him that overall it would cost him more than ICON he did not flinch. If anything it made him keener on the service.
This got me thinking…
I was reading an article the other day where a jeweller had made a mistake in pricing some weirdly coloured jade jewellery. She felt that because of the colour it would not sell so she asked her assistant to take 50% of the price. He misheard her and added 50%. The interesting thing was that the jewellery sold out in a matter of days. The now very expensive price made the odd-looking jewellery appear exclusive. People are happy to pay more for exclusive.
But in Finance?
A long time ago, when we were part of a private bank – Hampshire Trust - we held a golf day. I remember that the most popular thing on the day were the free umbrellas that had written on them “Hampshire Trust – Private Bankers”. Obviously good for posing on the golf course.
So even in Finance people like image, they like exclusive.
That’s why we sometimes refer to ourselves as a “Boutique Finance House” rather than a plain old factoring company.
Then I thought, what if we offer an exclusive “premium” service. One up from CID – what would this need to look like?
- It would only be offered to certain Companies. Exclusivity.
- It would need to be more expensive.
- It would need to be different – How?
Over to you….