Pay Up. The Art of Pricing Your Services.
Quick question have you seen this making its rounds on the old interwebs? It’s got me thinking about a few things.
First and foremost YES, ask for what you're worth!
Too many freelancers/ business owners are not getting paid what they should.
We’re very quick to tell people to ask for what they're worth or their product is worth, without any information on how to properly price a product/ service.
When assessing clients businesses I often look through all aspects of their company, right down to why they have priced something the way they have. Too often they will chalk their pricing strategy up to a “feeling”, a “best guess” ,or my favourite a shoulder shrug (you know the shrug you do with a forced smile, that’s really saying don’t ask me to explain that, because I don’t really know).
Now don’t get me wrong it’s entirely too easy to get wrapped up in the more exciting aspects of your biz. Like what am I selling? What does it look like? What does it include?
AND I GET IT!
But I am here to remind you that pricing your product/ service is one of the most important decisions you will make within your business. So I’m hopefully here to remind you of a few things without putting you to sleep, because well...numbers.
When pricing your product or service ALWAYS ALWAYS ALWAYS go through these questions:
Who is your customer? What are their needs? Their wants? Their problems? Their buying habits?(fun fact we go through all of this in our Starter Kit) Knowing this will provide a piece of the puzzle in terms of what they are often drawn to in regards to pricing, and what their budget would look like.
What is your per unit cost? What does it take for you to produce the goods? Think shipping, overhead costs, production etc. It’s very important to make sure that your expenses are built into the price of your goods/ services.
What are your goals? What do you need to maintain your business, and I would encourage you to think about what you need to grow your business.
Where are you positioning yourself in the market? Luxury vs budget. Remember the price often reinforces the brand. Consumers regard the higher priced product or service as better most times ( unfortunately this is pure psychology)
What is the competition doing? Make sure to dig into the market, thus ensuring you won’t price yourself out of it by under or over pricing your goods.
Where is the market headed? Is your industry on an upswing or is the demand slowing down?
It can seem overwhelming at first, but get out a pen and paper and work through it step by step.If you take anything away from this newsletter, let it be this…
You probably won’t get your pricing right the first few times, such is the dance of doing your own thing. Don’t be afraid to reevaluate and price your goods or services in the best possible way for you and your business.
A way that values your experience, as well as your overhead costs
Good luck, and if you ever need any advice I’m always here for you!