Pricing, Charging and Value
do you charge for the services you provide to your customers? What are you and
your services really worth? And how do you establish that, and more
importantly, convince actual and potential customers, particularly in a world
where the price of everything is driven down to the lowest denominator with
apparently increasingly scant regard for actual value?
you are fundamentally a product based business, then establishing base cost,
adding appropriate related costs and a profit margin is relatively easy in
itself, and can to a degree be compared to the market. Even so, the value –
added aspect is still hard to establish. And if you’re selling a service, and
in a sense thus selling time, how do you price yourself adequately and fairly?
are some tips arising from experience and best practice:
the market – It’s clearly
fundamental to ensure that your costing is sufficient to actually cover costs
and establish a profit. Establishing a
good knowledge of the market and what your competitors are doing will help to
establish a base for your own pricing. But your own worth, reflecting your
differentiation from others in the market must be established too.
your own value – To
charge what you’re worth, understanding your own value is the first step. You need to clinically reflect on your
expertise. This will include your
professional qualifications and expertise gained over the years, as well as
the customer’s needs – Find
out what the customer’s real needs are. People use service professionals mainly
because they have an objective to achieve or a problem they need solved. Understand what solving the problem will be
worth to them and what the problem will cost them if it’s not resolved, and you
have a basis for establishing your worth.
your own worth – Self-worth
is at the heart of everything we do as individuals, and is also very important
from a business viewpoint. If you don’t feel 100% worthy, your self-esteem will
be low and your perception of your worth will be undervalued too.
on Value not Price – This is crucial. You need to encourage customers away from
looking at the price of your service, to seeing the value of it. Once this is
understood the price will seem low by comparison.
your Value – Don’t hide
your talents under the proverbial bush.
By ensuring that the customer knows exactly what they’ll be getting for
their money, they’re much more likely to do business with you and pay you what
Comfortable Talking Money
– This is also important to charging what you’re worth, as if you don’t become
comfortable discussing it, you will never be able to negotiate properly, and therefore
always risk undercharging.
summary, be strong in your belief in yourself and your business, eradicate
negative feeling about money such as “money is the root of all evil”, be
confident in imparting and discussing your worth to customers, and remember the
often misquoted but relevant phrase about “a man who knows the price of everything and the
value of nothing!”
4 July 2019