“As owner of a marketing firm I hate pricing. I hate haggling. And I hate the feeling of having to justify the value or cost of the work we do in order to get people to buy.”
Assigning specific, definitive dollar amounts to customized virtual products or providing services that help business owners create new opportunities for selling and marketing their own business, has proven to be very challenging. Even after 12 years of business ownership it is still a weekly battle. While we live in a digital world, people still have a hard time putting value on non-tangible products and services.
For example, lets look at a pair of jeans or a stereo system. Consumers understand they should expect to pay a premium price for a high-quality brand name product. They also understand that spending $20 on a pair of jeans versus $200 is often going to get them a subpar product.
However, in my world of inbound marketing and responsive web design, there seems to be a lack of understanding or appreciation in the time, planning, creative and technical effort involved in producing the final polished pieces that we deliver.
Over the last 12 years, having to justify costs has become much easier as our reviews, body of work, and reputation often speak for themselves. We are also much better at picking and targeting the right customers who understand the costs involved with professional marketing, planning, and design.
But, when you are first starting out, coming up with what you want to charge and why, is ultimately one of the most important and frustrating decisions you must make for your business. Setting the bar too high or low is always going to negatively impact your sales so the dance must go on and continue until you are in step with your target audience.
Do not have the expecation that you’ll eventually “figure it out.” You will forever be testing, setting, and resetting prices throughout the life of your business.
As much as I hate pricing, I do love selling… and it’s not because I enjoy making money (which is also true).
I love providing a valuable service and the opportunity to help others achieve success.
The challenge of establishing a pricing structure is to some degree a necessary evil. Instead of continuing to avoid it and not give the process the time and attention it deserves, I’ve tried my best to really do the opposite and explore all possible angles, opportunities, and come up with some ways to make pricing less of a headache, stressor, and negative experience for any business owner.
I have put together this comprehensive guide, Everything You Must Know to Effectively Price Small Business Services and will release each one in this 8 part series outlining all factors you should consider when pricing small business services and products.
I would not consider any one of these a direction to follow on its own. The combined and collaborative thought process of all 7 of these will help establish the right mindset to be competitive, fair, and still earn a profit for what you do.
My top 7 pricing concepts are:
- Getting Rid of Limiting Beliefs About Money
- Creating a True Cost Analysis of Your Business
- Avoiding the Pricing Push (overpricing)
- Avoiding the Pull to Cheapen Your Worth (underpricing)
- Pros and Cons of Time-Based Pricing
- Pros and Cons of Value-Based Pricing
- Monitoring & Grow While Maintaining Pricing
So stay tuned, over the next 14 days I will release a new article outlining one of the concepts mentioned above.
Pricing is hands down one of the most frustrating and difficult challenges small business owners face, and often drives many marketing decisions as well.
Simple answer, you can’t. And this is where most small businesses fail by not following proper procedure and logical steps when trying to build their business. In the past we focused heavily on developing websites for customers without first putting together a plan or strategy of how the website would be used to generate new business. Those days are over, and so are the days of expecting a website alone to acheive more growth and revenue. A website is a tool and part of a much larger strategy.
Stay tuned for 7 installments in this series that covers everything you need to know about effectively pricing small business services. We would be happy to discuss a marketing strategy with you as well. Schedule a free markeitng assessment and I’d be happy to discuss your marketing plan and pricing concerns.