A candid conversation about knowing your market, building the right offer, and charging what your service is genuinely worth
I sat across from a founder recently who had something genuinely exciting on her hands.
Amanda had left a 13-year corporate career and moved to Australia alone. After developing her expertise in health and safety, she spotted a real problem that needed solving. Her business, GotSafe Media, turns that dry corporate safety content into engaging animation and video that people actually watch and understand.
A market that clearly needs what she offers.
During our discussion, I asked her, “Who exactly is your customer, and how many of them are there?”
She said, “They spend a lot of money on safety.”
I told her I couldn’t find the ‘a lot’ button on my calculator.
It’s a mistake many business owners make. But this is one of the most common gaps I see in early-stage service businesses. The owner knows the problem they solve. But they haven’t sat down and worked out exactly who their customer is, how many of them exist, and what the opportunity actually looks like in dollar terms.
And without that clarity, everything else is built on a thumb-sucked foundation.
Think about it this way. If you’re a plumber, you wouldn’t just drive around a city hoping to find someone with a leaking pipe. You’d know your suburb, your ideal job type, and roughly how many households are in your area. Running a service business without that same clarity is the same as driving around hoping for a leak.
What I walked Amanda through applies to any service business trying to get out of the early grind and into consistent, profitable growth.
Here’s the sequence.
THE SEQUENCE
Who Is Your Customer?
The first thing I asked Amanda was simple: if I were a salesperson working for you, could I drive down the street and recognise a GotSafe Media client when I saw one?
She hesitated. And that hesitation told me everything.
If the person selling your service can’t immediately recognise your ideal customer, you’ll sell to fewer people.
Amanda knew she was targeting high-risk industries. But “high-risk industries” is a category. A customer is specific enough that you could spot them anywhere. And vice versa.
Do You Know What They Need?
Once you can name your customer, size the market. Estimate how many of your ideal customers there are and how much they spend annually in the space you operate in.
Then take 5% of that number. That’s a realistic slice of what’s available to you if you execute well. Why 5%? Apple, with all of its global dominance and billions in marketing spend, holds about 13% of the smartphone market. If Apple gets 13%, 5% is about right for an SME. And 5% of a genuinely large market is more revenue than most service businesses ever need.
Amanda had set a five-year goal of $5 million. But when we worked through the market size, it became clear the opportunity was likely ten times that. Plan for $50 million, and you start to see a very different business.
A Small Slice of a Big Market Pays Better Than a Big Slice of a Small One.
One of the things Amanda mentioned early in our conversation was that she’d tried packaging her service in different ways, but sales stayed the same.
That’s the outcome of offering a solution to a problem you don’t fully understand.
Here’s how I explained it to her. Before I built my own service offering, I thought about every conversation I’d had with business owners over the years of working with them.
The complaints always clustered around the same four things:
- Their team wasn’t performing the way they needed it to.
- Their finances were unpredictable.
- They couldn’t win business without discounting.
- Growth had stalled.
Those four problems are the outcome of listening to my clients until I could see the problems that needed solving.
For Amanda, the complaints in her market sound like: “Our safety inductions are so long nobody finishes them.” And “Our contractors don’t speak English as a first language, and half of them can’t read our procedures.” Those complaints tell her exactly what to build.
Listen to what your customers complain about and create your solution from there.
One of my clients couldn’t get more than $2,000 for their service before we went through this process. Once they could clearly articulate the problem they solved and how they solved it, their biggest deal jumped to $107,000. Their average deal is now around $30,000.
How To Add Value To What They Want.
It’s one of the questions I get most often: “How should my service-based business be priced?”
Most service businesses either work out what it costs them to deliver the service and add a margin on top. Or they look at what competitors charge and price somewhere near that. Neither method has anything to do with the value the client actually receives.
Snap-on Tools and Stanley Black & Decker both make professional tools. Stanley does $15.7 billion in sales and makes $700 million in profit. Snap-on does $4 billion in sales and makes $1.2 billion in profit. Snap-on sells less and makes more because tradespeople who depend on their tools every single day understand the value of not having them fall.
For Amanda, the conversation I walked her through went like this.
Start with what the client is already spending to manage this problem. The time spent creating safety documents nobody reads. Or the workers’ compensation claims from incidents that better communication might have prevented. That total is usually much bigger than anyone has stopped to add up.
Then look at what happens if the problem doesn’t get solved. If a worker is seriously injured because a safety procedure wasn’t understood, the cost to that business is enormous.
A reasonable price sits somewhere near the total they’re already spending, plus a proportion of the cost of the problem continuing. That’s a very different number from what you’d arrive at by comparing yourself to the nearest animator or video production company, because it’s built on solving their very real problems.
Charge Them What It Costs Not to Have It.
When a client asks for a discount, go back and show them what the problem will continue to cost them if nothing changes. The price conversation usually resolves itself from there.
No Discount On Value.
Discounting tells the client the price was wrong to begin with. It undermines the conversation you’ve just had about what the problem is costing them. If the number is built on their reality, hold it.
At the end of our session, I asked Amanda what she was taking away from our conversation.
She said two things: getting clear on her market, and deciding where to focus.
You can’t price properly, or build the right offer, until you’ve had enough real conversations to understand what your customer is actually struggling with.
None of this is complicated. But it does require you to stop building and start listening first.
YOUR MOVE
No Discount On Value.
- Pick up the phone and call three of your best clients.
- Ask them what they were struggling with before they started working with you, and what’s different now.
- Their answers will tell you everything you need to know.
Paul Claessen
Get your win