Pricing is a taboo topic nowadays. With the rise of freelancing, social media marketing, and free online-training certificates, it feels like people who offer services are having to get more and more competitive when it comes to pricing. So, how much is too much? How low is too low? How do you even know how to begin with pricing?
Your pricing has everything to do with your brand. Whether you’re an agency like us providing more intangible services or you’re a lawn care business providing more tangible services, nailing the right price affects the way you’re perceived more than you think. Also in today’s competitive world, pricing is make or break for your business. So, how much thought have you put into your pricing? If you’re struggling with pricing your services, here are some things to consider.
| TRUE VALUE PRICING |
First, it is important to remember that you should always price yourself at your true value. Most people can sense authenticity and if you’re priced inauthentically, chances are they’ll sense it and not use your services. At the end of the day, it all boils down to trust. If you’re pricing your services too high, people simply will expect more that you have to deliver. If you don’t deliver, they’ll buy it, experience it, and will not trust anything else you put out and never return. In the same way if not even more, if you’re priced too low, they’ll also have their reservations.
Take Fresh & Easy for example. When the chain entered the US in the early 2010’s, they offered amazing quality fresh foods for a very low price. So low, in fact, that their customers overwhelmingly felt distrust towards the brand saying things like “how can it be good if it’s that cheap”. The chain literally failed because they offered high-quality fresh foods at a competitive price. That’s it. Clearly, price has a lot to do with how you’re perceived.
| FUNDAMENTALS OF PRICE PSYCHOLOGY |
Another important aspect of pricing your services is the importance of price psychology. Like we mentioned above, it has everything to do with the way you’re perceived and how people consume your services.
While this is a broad category, this can include many aspects of your services. Understanding principles like the decoy effect or the halo effect is paramount to setting your prices right. You want to have a grasp on the reasoning of your people before you sell them anything.
| TIERED PRICING |
Many service providers find success in tiered pricing systems. This offers value in many ways. First, it gives your customer choices. As a customer, feeling like you have the power to make a choice will give you not only give you comfort in knowing you have options, but will also give you a sense of power in the game. People fundamentally like power and having options for them to decide on gives them that. They’re no longer at your discretion for quoting custom-pricing and they don’t feel like they can get taken advantage of if you offer standardized packages.
In addition to that, tiered pricing gives your customer a feeling of reassurance. If they opt for a lower plan, they feel like they’re not risking too much by trying a lower price. For them, it’s a great way to dip their toe in the water with your service and for your business, it’s a great way to get new customers in the door. Once you under promise and over deliver, they can upgrade their plan and keep growing with your business.
| OFFER PRICE BREAKDOWNS |
By being transparent about exactly what they’re getting and also what you’re doing to get them that, the customer will find comfort in what they’re purchasing prior to purchase. Not only will this increase the likelihood of their purchase, but when the service is actually being performed, the price breakdown will give accountability to both the customer and your team.
While this may seem like a given, you’d be surprised how often it is forgotten. At the end of the day, we all want to know what we’re getting when we’re investing time and money into it. Whatever you’re selling and however you’re selling it, offering a price break down will be incredibly beneficial to your customers.
| TIME IS MONEY |
Lastly and probably most importantly, pricing your services has to do with a currency that’s worth a lot more than money; time.
Everybody is busy and everybody has deadlines. If a someone is approaching you for services, they need help in that area because they likely don’t have enough time to dedicate to it. So, don’t waste their time and don’t waste yours. You want to be sure that your processes are streamlined, convenient, and personalized to whoever you’re meeting with. This will not only show them that you respect their time as a prospect, but shows them that you will use their paid time wisely when you’re actually performing the service. To your benefit, your company will also save valuable time and money in the long run. When you save time, everybody is happy.
If your current marketing strategy just isn’t cutting it anymore, you’ve come to the right place. Our team of experts here at Blackwood Creative would be more than happy to work with you and help you meet and exceed your business goals. We’re in the business of building remarkable brands – yours could be next. Reach out to us today!