One of the things I’m asked over and over again, is how to price effectively. Many people who run their own service based business are totally confused about how to price. Many can’t decide on whether to charge an hourly rate, a daily rate or a fixed price – and in the end they just go with their gut. Maybe it “sounds” like the right price or maybe you spend ages finding out what competitors charge and price your fee just a little bit lower than theirs, in order to win the business. Maybe you have a price in your head and then when you’re in front of a client you end up offering massive discounts. Does any of this resonate with you?
When I first started out working for myself as an accountant – I fell into the same trap. I priced my services a little lower than what the prospects were currently paying their existing accountant. I was so keen for new business (understandably) and even more eager to please – there was no strategy. Sure – I picked up clients very quickly. Why wouldn’t I? But I was easily becoming a busy fool. I was also offering massive value to my clients for such a small fee. I was investing many hours in my clients for very little in return.
So what was the issue?
Well, let me take you back a few years to when I actually realised the problem and got to fixing it. In 2013, I made one of the best business decisions I’ve made so far. I got myself a business mentor. He taught me many valuable lessons and strategies which I will carry with me for a long time. But the thing that most stands out is this: until you really value yourself – and the value of what you bring to the table, then you will never ever get your pricing right. Isn’t this so true. How do you ever expect your clients to value you and recognise your unique qualities until you know what these are yourself? How can you sell your services and get people buying from you if you don’t really believe in what you do?
There are many pricing strategies and psychologies which you may adopt – and I have researched many over the last few years and urge you to do the same. But before you even look at any of them, look at yourself – look within. Work on yourself and have the confidence to know you’re worth it and in turn, you will be able to price so much better.
Have you ever recognised that by offering a low fee to a client you are actually doing them a disservice? You need to charge a fee that allows you to do the best job possible for them and to the best of your ability. If this is the type of high value, platinum service you want to provide then that’s not cheap. Anyone can get anything done for a very low price but what value will they receive in return? So – be true to your clients by charging a fair price that allows you to offer incredible customer experience.
Another way you can develop your pricing is to work on how you can become the key person of influence; the expert in your industry. How and where do you even start? Well start small – something is always better than nothing and progress, not perfection should be your mantra. Top tips – get networking, build relationships and talk to people! Start blogging and give valuable information away for free. Consider writing a book and look for opportunities to speak publicly. In other words, take every opportunity you get to raise your personal brand and company profile. It will take time and won’t happen overnight but nows the time to make a start. Before you know it your reputation will precede you and you will begin to know your own value which will lead to better pricing decisions.
If you would like some help with how to price your services or for some mentoring, please do get in touch via email firstname.lastname@example.org
This blog was first written for Women in Business NI Blog – you can also read it here