Successfully pricing your services is part art, part math, and part psychology. It’s a common struggle for most small business owners.
Over the years, I’ve found that pricing and money conversations are amongst some of the most difficult conversations. And, I’ve also noted that more than 95% of small business owners are under-valuing their expertise.
There are several key elements to consider when you create your pricing strategy including:
- Costs (costs of production, delivery, etc)
- Customer (will your customer think the price is too low or too high for the transformation they will receive)
- Competition (is there a general rule of thumb in your industry i.e. Netflix, Prime & Disney charge about the same amount)
- Compatibility (between what the customer will pay and the anticipated profit margins of the business)
- Channels of distribution (not so important for service-based products but could dramatically impact product-based)
And we also know that your pricing should:
- Demonstrate ‘perceived value’ for the transformation your customer receives.
- Convince the customer to purchase.
- Give your customers confidence that you and your service are right for them.
That’s a lot of things to consider when setting your rates!
I can honestly tell you that if you’re a service-based business owner, you are most probably under-charging for your services.
And yes, I can hear you saying things like:
- My customers won’t pay more
- My conversion rate dropped significantly when I priced my services higher
- I don’t think the service is worth that amount
And many more……
So how do you know whether you might be undercharging for your services?
Are there signs or signals that it’s time to raise your prices?
The answer is YES to both of these questions!
In this week’s episode of Work Less PROFIT More business podcast, I’ll share with you 10 Signs that it could be time for you to raise your prices!!! And why it’s so uncomfortable!
Pricing isn’t rocket science. While it does seem difficult, by keeping in mind your very best dream client, the transformation you provide, and the ‘value’ of the transformation, you will find the courage to charge more and thus profit more for the same amount of work!
Be sure to listen, share and subscribe here!
YOU CAN DO THIS!
Diana
