How To Price Your Services? – Answering this question is important
Setting up proper prices for your services is one of the most crucial elements of starting your business. It is a part that can either make or break your business. Let’s find out “How To Price Your Services effectively”.
And as a new business owner, you want to make sure to determine a price for your services before you even start offering them to potential clients. You don’t want to be caught on the sales call stuttering when it comes time to talk about pricing.
There are several ways that you can start charging for your services. You can charge hourly, by deliverable, have a monthly retainer set in place, by project based on the value you are providing, or per item or a package.
In my opinion, it should not matter how long something takes you to get it done if you are providing the same amount of value. Therefore, I am not in favor of charging by the hour and prefer charging by the project value.
People will hire you because they believe you can do something for them. They believe that your solution will resolve their problems and challenges and they are willing to pay for the end result.
So how do you do that? How can you calculate the project value of the service you are providing, while being fair and accurate and making sure that your business can actually make money?
The first step is to conduct a simple market analysis to determine who you are competing with, what they offer, and how much they are charging for their services. Go online and find out your top 5 competitors and check out what products they are offering, what problems and challenges they are solving, and how they are packaging and pricing their services.
The next step is to get a good understanding of what it costs you to provide your service to customers. For service-based businesses, this usually includes all the direct costs when performing the project each and every time, such as your time for the work that you are doing, as well as any operating expenses that your business incurs on a day to day basis. That can include your marketing cost, software fees, office supplies, and anything else you need to run main business activities.
The third step is once when you know what your competitors are charging and how much it costs you to provide the service, you want to talk to your potential customers and see what they are willing to pay for that service and why. You can also do a simple survey online and gather the information rather quickly.
With that information and research that you have done, you want to start by setting up your pricing. You can provide a three-tiered pricing option. You can create a small, medium, and large package or bundle different offers. Most clients will choose the middle option, so make sure it’s your sweet spot. For instance, your small offer can be a basic website for $1000, medium offers a 10-page website with a copy for $5000, and large offers a complete website & mobile design for $10000.
One thing you want to consider when creating your pricing is what are your personal financial goals, and how many of your medium-tier priced packages would you need to sell to meet your income goals?
Once when you have your basic pricing and packaging in place, you can create upsells (add SEO service with your website design purchase) or a down-sell (a first-time client discount), to make sure that your potential client has an option to either upgrade your service if they think you are amazing or purchase something at a cheaper price if they are not 100% sure if they should go with what you have to offer.
The key to a happy customer is to under-promise and over-deliver. So make sure to keep your customers happy, keep them close, bring tons of value, because that way they will provide amazing reviews and references to bigger revenue coming in.