Deciding on price is one of the hardest choices a business owner has to make.
It isn’t always just a one-time decision either, as you expand your business into new things to sell, you will be met with this dilemma over and over again. This is why it is so important to know the essential steps to pricing your product or service.
It seems like such a simple thing, but money can be so emotional for us causing us to hesitate. When we hesitate, it’s easier to keep putting it off into that “One Day” pile that you swear you’ll get to some day.
The reason for this might be that you are worried that people will judge you, laugh at your pricing, or feel ripped off.
This puts us into negative energy by assuming a bad outcome.
It is also dangerous territory because we start to associate our pricing with our worth as a person instead of looking at the product or service objectively. Or we see our competitors charging more or less, making us feel insecure about our pricing points.
My first business failed because I was undercharging everyone for my work. I’ve discovered from first hand experience that the devaluation of your talent puts you in a position where you lack the financial resources to take care of your personal and professional needs. Sadly, this may also lead to depression, bankruptcy and foreclosure.
After a decade of being in business, there are many strategies I have learned about pricing.
1. The first step is to put specifics on what you are actually selling. Take some time to list out the benefits you provide and how much you know about this industry.
If you bring tremendous value to people’s lives, you should get paid accordingly. As a business coach and revenue strategist, when people work with me and follow my guidance, they can achieve financial abundance.
Coupling the potential they could make with my experience makes my price point a real commitment, but a worthwhile one for business owners who desire results.
The size of the problem and your experience in the area make a difference in the price point you are asking for. For example, the investment in an e-product is quite different from a live workshop. I’ve observed far too many female entrepreneurs not taking the time to calculate the cost of the project before launching.
2. The second step is to determine where your product or service fits in your overall strategy.
Is this a product to get people in the start of your sales funnel or is it direct access to you and your knowledge?
Before people come right out and hire you, they usually want to get a taste of what you can bring to the table. When you have products they can test to see how you can help them, they are likely to try that first.
An example of this might be a complimentary webinar, ebook, set of worksheets, free trial and/or ½ day workshop.
3. The third step is to evaluate how much of your knowledge this product or service will contain.
Does this contain a solution to a smaller problem, or is it solving a much larger problem? Some people are just looking for one problem to be solved, such as a script for a pitch deck, instead of something much bigger like an overall startup business strategy.
At its core, complexity fosters growth. How exclusive is your product, service or program offering? Is there a high level of craftsmanship and customization involved? Does it address a client’s core desired feelings?
Price is based upon a perception of value. Therefore, a response of “yes” to all 3 of the aforementioned questions, you are positioned for a premium product pricing strategy.
4. How much time is this product or service going to take?
There are usually two kinds of pricing models: one requires upfront work and no time afterwards, and the other requires your time after the purchase.
Something such as a book requires all your effort and work upfront to create the product, but once people buy it, it is pretty much a done deal. Unless of course, you are publishign a 2nd ediiton of your book.
Consulting work, however, requires a large amount of your time, energy, and focus after the purchase is complete.
Know Thyself. If you are an introvert and you want to offer a concierge/vip style product, service or program, it is a good idea to hire an extrovert to support you in maintaining a harmonious, joy-filled customer experience.
5. Determine if you want to partner with other people in your industry.
Partnering with other people in your industry can create a higher-priced product. Some options include partnering with people to create a product or course, or selling someone’s information product as an upsell to your own product.
The last thing you want to do is make a deal with the devil, so do a bit of research before signing any type of partnership agreement.
Not everyone shares your values, ethics and morals so use your intuition and discernment.
6. Make your marketing match the price.
The final step in this journey is to make sure that your marketing matches the price you are asking.
This means the higher you go in asking price, the more a prospective client expects. This also means that you will need to have all your testimonials ready, ensure that your website won’t crash, a professional looking website with compelling sales copy and a customer service team delighted to answer any questions.
Many entrepreneurs do not make enough sales because (a) they don’t spend the time to make sure their marketing justifies the price they are asking for; (b) their value proposition is vague and ambiguous and/or (c) they try to sell a product/service that the market has no interest in purchasing.
What tips do you use to determine your price for your products and services?
Kadena Tate. Author. Speaker. Thought Provoker.
Need Courage? Kadena Tate is the author of “Be Fearless”, an Amazon Bestseller. Kadena believes you’re here to live out loud, to ditch the nonsense and shine so bright you need shades to keep going. She helps you with cultivating the courage required to productize and monetize your expertise. http://www.KadenaTate.com