12 Ways to Best Price Your Service

1. Avoid Industry Pricing

12 Ways to Best Price Your Service: When establishing your price, don’t look at what your competitors are doing, look at the price premiums non-competing businesses serving your market are getting. Identify your value proposition – image, innovation and time-savings – and price in accordance with the premiums these non-competing businesses are charging for the same value proposition. Now you not only have a methodology for setting your price, but for justifying it to your buyers as well.

Thanks To: Dale Furtwengler of Furtwengler & Associates, P.C.

2. Ask For Assumed Value

12 Ways to Best Price Your Service: Pitch Contents: When pricing services I often will begin with having the prospect or client answer, “what would it be worth to you if (the problem were resolved, this capability was available, efficiencies or effectiveness improved, etc).”. Once the prospect has answered some amount – it often is easy to ask for a fee that amounts to some percentage of that, but had I asked for multiple thousands initially, the answer would have been NO.

Thanks To: David Zahn of ZAHN Consulting, LLC

3. Pricing For Private Practice

12 Ways to Best Price Your Service: Pricing for therapists or similar private practice: Price comps can be found at online therapist listings for others in same area/similar years of experience, degrees, etc.To calculate fees, based on total income goal for the year (using 100K as example): divide that by 52 wks. Divide again by various potential fees. Ex: it would take about 20 client hours @$100/hr to reach 100K. Adjust hrs/wks (to allow for vacation) or amt charged to change outcome.

Thanks To: Jaelline Jaffe PhD of Marketing 101 for Therapists

4. Priced To Work, Not Wait

12 Ways to Best Price Your Service: I price my work at about half what I used to charge for marketing/communications. It is a misunderstood talent and many people think they can manage this area internally. It’s essential to work on a consistent contract rather than by project, to have the time to create success. If necessary, front-load the project with a fee and charge extra for events, to keep the monthly fee below the threshold of resistance. One can either work, or wait. I am priced to work, because work creates more work.

Thanks To: Susan Wilson of Susan Wilson Marketing

5. Never Undervalue Your Product

12 Ways to Best Price Your Service: If you offer a service or product that is truly valuable, then there is no need to depreciate it. You will not make more money by undervaluing your product, instead you will just pick fights with the competition; sure enough, you will lose.

Set the price higher than the competition, and your product will automatically seem more interesting. People will begin to wonder why your product or service is more expensive, and you will have more inquiries. Believe in your product.

Thanks To: Sean Osafi of Kill it on eBay

6. How To Max Your Yearly Income

12 Ways to Best Price Your Service: 1. Determine how much you want to make per year – 2 – Divide it by 220 (max working days) – 3 – Multiply that number by 1.5 which adjusts for sick days, down days – 4 – For example, if you want to make $120,000 per year you have to earn (120,000/220/*1.5) or $818 per day to hit your target – 5 – If people do not complain, or hire you too quickly, you are too cheap – 7 – If people complain about your prices, it is time to question your value proposition.

Thanks To: Jeffrey Taylor of Jeffrey Taylor Group

7. Think Like Your Customer

12 Ways to Best Price Your Service: Too many entrepreneurs make the mistake of focusing on costs, then “marking-up” to determine price. Better to start from “What does your service do for your customers?” Try to monetize how your service reduces costs or increases revenues for your customers (if you a B2B) or determine how valuable the service is to your customer in terms of time saving, stress reduction, etc. (if you are selling to a consumer). Set a price below customer value and you and your customer will win.

Thanks To: Kay Plantes of Plantes Company, LLC

8. Price Should Depend On Value

12 Ways to Best Price Your Service: The price of product should depend on their real time value in the life of your customers. For e.g – You sell flowers, the value of your product is more on valentines day as compared to the rest of the year. Therefore, your customer is ready to pay more for it on that day.

Hence, always price your products on the basis of the value they have in real time.

Thanks To: Mark Lee of Valentines Day Gifts

9. Children’s Yoga For Less

12 Ways to Best Price Your Service: Because Children’s Yoga is new to the marketplace, we had to look at alternate children’s programs and compare local children’s program rates that offer classes in the market we are entering. We then offer our classes at a slightly less rate. The session term is another factor that we look at when we are determining what fee to charge and the length of the session we are offering. We ask locations and sites that we contact what they pay, or what parents pay for programs like ours.

Thanks To: Doreen Foxwell of The Children’s School of Yoga

10. Keep Them Coming Back For More

12 Ways to Best Price Your Service: To properly price professional services in today’s environment, there is no easy computation. You’ll need to analyze the competition, identify your client’s goals, calculate what it will take to achieve them, build in contingencies & consider factors such as reputation,value,marketing, branding, positioning, costs & trust.

Moving away from the “billable hour” to flat fee pricing means you’re selling results, which keeps clients happy and coming back for more.

Thanks To: Susan Martin of Business Sanity

11. Let Your Customers Tell You!

12 Ways to Best Price Your Service: The best way to price your products and services is to ask your customers! Often business managers do an elaborate cost allocation per product and add a “fair” margin to determine the “fair” price for their products. I can guarantee you all this does is give you a consistent price-consistent related to your cost anyway. The best pricing for all is based on surveys of your customers as to demand and need for a particular product. On that basis you can determine the true value to your customers.

Thanks To: John McQuaig of McQuaig and Welk,PLLC

12. Price Yourself Into The Market

12 Ways to Best Price Your Service: Start with a decent price that does not make your service look cheap.If you go too low, people will think you are not good at what you do. Consider the range of fees for similar service in your area. Ask enough to keep yourself motivated and to make sure you are not losing money on the work. Then as your schedule fills up–when you are say 80% booked, raise your price for new customers. If you still can fill your calendar at the higher price, raise your price for your old customers.

Thanks To: Patricia King of Patricia King Partners LLC