Navigating A Recession
It’s a mistake to do business planning based on the predictions of economists. A better approach to navigating a recession, or any other economic environment for that matter, is to stay close enough to your clients to understand the value they perceive in your service. More in this episode.
The Price and Value Journey is presented by John Ray and produced by the North Fulton studio of Business RadioX®.
TRANSCRIPT
John Ray: [00:00:00] Hello. I’m John Ray on The Price and Value Journey. Navigating a recession or any other major economic event, for that matter, there’s lots of talk right now about recession and some conflicting views about whether we’re in one. Paul Samuelson, a Nobel Prize winner in economics, wrote that the stock market had predicted nine of the past five recessions. What he failed to point out is that economists have a similar track record, if not worse.
John Ray: [00:00:34] Asking whether we’re in a recession to determine what business moves to make in our individual businesses is the wrong question. The better consideration each of us must weigh is whether our clients perceive value which is in excess of the price they pay us for our services. When there’s a major economic shift, business owners face what you might call a value decision point on everything that they buy.
John Ray: [00:01:02] They’ll reassess their perception of the value they think they are receiving from the goods and services they purchase and compare that new perceived value to the price they’re paying. These value decision points come repeatedly over the life of a client relationship. Sometimes without us as service providers even knowing it’s happened.
John Ray: [00:01:26] Value decision points most certainly occur in a down cycle of business conditions, but they occur across the spectrum of macroeconomic events, whether it’s a recession, an inflationary period, a pandemic, or when the pendulum swings back toward prosperity. Sometimes value decision points result in changes to client perception of value, which are very minor. Other times, of course, they can be momentous, or, often, they are somewhere in between. Shifts at the micro level bring business owners to a value decision point as well.
John Ray: [00:02:04] One example is when you announce a price increase. The business owner or manager will naturally assess whether the value they believe they are receiving from the professional relationship they have with you still exceeds the new higher price. Another example is when there’s a service offering change, such as a change in personnel that are doing the work. It could also be that the micro level change has nothing to do with you, such as when there’s been a major internal blow to the business.
John Ray: [00:02:36] If you’re a solopreneur or a small firm professional services firm owner, the question is not whether we’re in a recession. The question for you is whether your client’s perception of the value they receive from your firm remains more than what you’re being paid. And that’s always the question in all economic cycles.
John Ray: [00:03:00] I’m John Ray on The Price and Value Journey. Past episodes of this series can be found at pricevaluejourney.com. If you’d like to connect with me directly with an email, send me a note, john@johnray.co. Thank you for joining me.
About The Price and Value Journey
The title of this show describes the journey all professional services providers are on: building a services practice by seeking to convince the world of the value we offer, helping clients achieve the outcomes they desire and trying to do all that at pricing which reflects the value we deliver.
If you feel like you’re working too hard for too little money in your solo or small firm practice, this show is for you. Even if you’re reasonably happy with your practice, you’ll hear ways to improve both your bottom line as well as the mindset you bring to your business.
The show is produced by the North Fulton studio of Business RadioX® and can be found on all the major podcast apps. The complete show archive is here.
John Ray, Host of The Price and Value Journey
John Ray is the host of The Price and Value Journey.
John owns Ray Business Advisors, a business advisory practice. John’s services include advising solopreneur and small professional services firms on their pricing. John is passionate about the power of pricing for business owners, as changing pricing is the fastest way to change the profitability of a business. His clients are professionals who are selling their “grey matter,” such as attorneys, CPAs, accountants and bookkeepers, consultants, marketing professionals, and other professional services practitioners.
In his other business, John is a Studio Owner, Producer, and Show Host with Business RadioX®, and works with business owners who want to do their own podcast. As a veteran B2B services provider, John’s special sauce is coaching B2B professionals to use a podcast to build relationships in a non-salesy way which translate into revenue.
John is the host of North Fulton Business Radio, Minneapolis-St. Paul Business Radio, Alpharetta Tech Talk, and Business Leaders Radio. house shows which feature a wide range of business leaders and companies. John has hosted and/or produced over 1,500 podcast episodes.
