Infrastructure Victoria has just released its 30-Year Infrastructure Strategy. Its looking at ways to improve the productivity in Victoria through better use of infrastructure. And they see Pricing as a really key part of it. The word Pricing is mentioned 68 times in the report.
One thing that I found really interesting was how they look at the concept of providing services for free. So the Victorian Government feels at the moment that there are a lot of services that people get for free and they are taking advantage of it and overusing those services.
For example, parking your car near public transport, being able to drive on the roads and not pay any tolls or fees for doing so, apart from your Annual Registration Fee and riding a tram in the CBD of Victoria. These trams are absolutely jam-packed. Why are they jam-packed? Because they are free. If you put a small price on them, then only the people that really want to use them would actually do so and that will be less congested. The Government wouldn’t have to keep going out and buying more and more trams.
So this is what happens when you provide things for free. People actually use them and they use it a lot more than perhaps was intended.
Now there is a couple of really good implications of this for business and the first one is: Have a look at whether there are things that you are currently providing to your clients for free and whether you should be doing so or not? Should you be charging for those? Are some clients (or perhaps not even clients) taking advantage of you because you are providing so much for free.
And secondly, the flipside of this: Are there things that you could provide for free that would cost you very little that would build your relationships with clients? And that could be content for example, running webinars and seminars and training and education. It doesn’t cost a lot to do so and they might then see how knowledgeable you are and they might start to build more trust in you and feel that they want to use your services going forward.
Now I just want to finish with one very short anecdote that is going to be relevant to everyone listening to this video. You’ve been listening now for a couple of minutes. Of course you didn’t pay for this video. I’m going to ask you, had I have charged you a very small amount that would have made no difference to your life whatsoever, let’s say $1, would you have paid for it or not? And I dare say you wouldn’t have because you are only prepared to listen to videos because they are free and the same applies in the way we think about everything. If something is free, we are much, much, much more likely to use it.
So take that thought and think about how you’re going to apply in your business. Thank you.
If you would like to see this post in a video format, then please watch below:
