Pricing your product or service can be done in so many different ways. The big question I’ve learned is: How do you want your potential clients to see you? Do they want to see you as a low-cost provider of services, or do they want to see you as providing a quality service?
Pricing Strategies
You can price your product based on:
- Your Competition
- A Margin That You Need to Earn: Based on the cost of your product or service.
- Value Pricing: What it would cost for the individual to make that themselves or to provide that work themselves.
- Opportunity Value: For example, if you’re a caterer, do you charge more for an event on a Saturday or possibly on a holiday than an event in the middle of the week?
Real-World Examples
Take an airline: the price you pay for a ticket depends upon when you’re going to fly, where you’re going to fly out of, and what benefits you’re going to have as part of that ticket (e.g., is baggage included, is there priority seating, is there early entry onto the plane).
Lessons Learned
I’ve attended seminars on pricing and realized that I might be underpricing my services, sometimes not even covering costs. I’ve tried across-the-board pricing increases, but they didn’t deliver the results I had hoped for. This approach led to losing some beloved clients while retaining some challenging ones.
Now, I highly recommend testing pricing increases on clients that are a challenge first before you implement it across the board to all your clients.
In conclusion, finding the right pricing strategy is a journey of understanding your market, your costs, and most importantly, how you want to be perceived by your clients. By experimenting and learning from real-world examples, you can strike a balance that ensures both profitability and client satisfaction.
For more information on Pricing check out (#1 in the Pricing Series)
If you have any further questions or need additional information, BudgetEase is here to help!
