Many entrepreneurs face struggles when they work to set their business pricing, particularly with complex service offerings.
It isn’t easy as there are always different projects that require adjustments and many considerations with respect to price.
However, there are some mindset and behaviour tips that may help you to work through the challenges of setting your business pricing through having a foundation from which to refer.
What NOT to do:
1. Don’t cheapen yourself
While it is tempting to think that a client-is-a-client – you are making you and your business appear as just another off-the-rack offering. If you truly offer a special service, then this must be communicated to your potential client. Therefore, presenting an “anytime, anywhere” approach will lessen the importance of what you have to offer. Whether you are aware of it or not, your value is communicated through improper pricing strategies, particularly if it is too low. A higher price signals exclusivity, quality and value.
2. Don’t worry about what your competition is charging
It is important to realize that your competition likely has a different business model than you and even if they don’t, what they offer for what price is likely very different. Focus on you, your business needs and moreover who your client is and what they need, and you will be much more successful.
3. Don’t ask your client what their budget is
As a business person, your pricing requirements should reflect your business needs. The budget that your potential client has to hire you is not the only part of the pricing consideration. More often than not, clients don’t actually know what a particular project would cost them and further they don’t relate what they are receiving to the amount they are paying. Also if they believe they can dictate your price, you are left in a vulnerable position that puts them in the driver’s seat, rather than you being able to show them what value you deliver that is unique to you.
4. Don’t trade “dollars for hours”
This is a model that is sure to cause you to undercut your services and result in haggling with clients for what exactly you have done and how long it has taken you. You don’t want to be subject to such specific criticism. After all what difference does it make how long it takes you to perform a service – when results are all that matter.
What TO DO:
5. Invest in quality
Although it seems obvious, many smaller business owners do not consider the quality of their clients as important, but rather they focus on quantity. As with anything, you are working to get to those whom really, truly need your services and who you can truly connect with. The bigger question is – how do you find them? You must spend the money and time committed to find them. You don’t want those only looking for the lowest cost option, but clients with a real understanding and feeling for what they are looking for.
6. Present your results
Be sure that your clients understand what results that you provide, not the length of time or the process for getting there. Let them see client reviews and explain to them what results that you have achieved for them. Be sure to be descriptive and specific to convey the value of working with you and be sure to never ignore the intangible benefits of working with you.
7. Find the right clients
At the end-of-the-day – you don’t want to work with everyone as there is no possible way that you will appeal to all potential clients and frankly: you don’t want to!
Therefore, have a method to find the right clients as they will be engaging and pleasant to work with while allowing you to be able to display your best talents. Further, they will provide repeat business and referrals.
8. Have confidence
When you exude the confidence that you should, your clients are likely to understand the value of what you have to offer. You must respect yourself and what you do – if you don’t then re-engineer your company and your life so that you feel this way about yourself. As in the old saying “believe in yourself utterly to have others believe the same.”
Always communicate the uniqueness, value and specialty of you – so you attract those who can appreciate you.
These approaches to pricing, although not empirical specifics, will give you a general approach to help you to work towards adapting a different mindset when making decisions about your pricing model.
© Bird’s-Eye Accounting