It’s true: most business owners get tripped up on pricing at one time or another.
While there’s actually not a truly scientific way to set your prices, there are a few guidelines you can follow to make the process less tricky.
1) First and foremost, remember your big picture clarity: who your target market actually is. Have you done your research about their income level, buying habits and what they tend to spend on services or products similar to yours? Get really clear here.
2) Look at others who sell similar offerings in similar industries and pay attention to what they charge—both low end and high end. When all else fails, pricing your offer somewhere in the middle can be a great starting point.
3) Get clear on how much you want to make on your particular offering AND how much work you are willing to put into it. This is all about revenue desired vs. the costs involved in bringing the offer to market. How much do you believe you can sell? Are there fixed, variable, or upfront costs? How much of your own time and effort are you going to have to spend?
4) When pricing an offer, know how it fits into your big picture or funnel: is it more an introductory offer or something premium? Does it fall in the middle?
5) Be crystal clear on the benefits and results you can provide. Remember that it’s crucial that you quantify the value of the results you get people. How will it improve their life, health, business, or relationships? Educate prospects on these benefits and connect with them emotionally.
Bonus: my personal pricing philosophy: I price high enough to make a healthy profit, while still feeling like people are getting a steal for the value they’ll receive.
Also, don’t forget that owning your expertise and having confidence in what you offer count for a lot, and that testimonials and endorsements also play a role in how much you can charge.
Finally, it doesn’t hurt to remember that passion goes a long way—prospects love to see that you’re excited about and stand behind what you offer. People will often pay more just for that!
The fact is, most people undercharge. But think of it this way: the higher the price, the more a customer or client takes things seriously, and the better their results. With that in mind, and the additional factors mentioned above, you can price your next offering with confidence.
(Photo Credit: Jeroen van Oostrom)