The secret to getting your prices right.
One of the parts of business that I’ve found really challenging is setting prices.
In the UK it’s often seen as crass or boastful to talk about money. Even if you do a lot of Googling looking at similar businesses to get a sense of the market, their prices may not feel right for your business.
From conversations I’ve had with other women, I am not alone in struggling with this.
To save you scrolling, I’m going to tell you what I’ve found to be the secret to setting a price that people will pay for your work.
What’s your product worth to your client?
What’s the value to them? Not you.
This might seem obvious but often when talking about setting prices the conversation veers into charging “what you’re worth” territory.
The problem is your price is not really about you. Your product or service solves a problem, fills a need or enhances the life of your customer.
It is adding a certain amount a value to their life and it’s the value of this transformation that needs to be reflected in your price.
For example, this week Tracy had a tooth removed.
This tooth has been negatively impacting her quality of life for sometime.
Getting it removed meant no more face pain. It also meant she can travel and live her life with peace of mind.
This alone adds a huge amount of value to her life. This value increased when the process was quick, easy and relatively painless.
All this considered, she was happy to pay the price because it reflected all the value this procedure was going to bring to her life. In fact she said if she could have had the appointment sooner she would have paid double, even though the Accumulator is one of her top archetypes (they do like to hang on to their cash)!
Your price works when it matches the value of the experience you are bringing your customer.
Also, the dentist did not offer Tracy lots of bonus treatments. If he’d suddenly offered her a free eye test, she would have thought he was mad, or shady.
When setting a new price, we often try to add value by packing it full of bonus content. But are these bonuses what your client asked for? They are interested in the value set out in your original product or proposal.
If you’re starting to feel overwhelmed, don’t worry. The beauty of setting your prices this way is you can stop worrying about what you’re worth and start focusing on all the joy and brilliance you are adding to the world. As Tara McMullin says, you are priceless but your work isn’t.
It has a perfect price point, it’s simply a matter of discovering it.
Prompts to get you started:
1. What value are you bringing to your customer?
Are you saving them time? Are you easing their anxiety? Are you adding beauty to their lives or making them feel more confident?
2. How can you quantify this?
Are you reducing their travel costs? Giving hours back they could spend with family? Helping them shop less? Spending time figuring out what’s quantifiable about your products value will really help you set your prices.
I really hope this helps you price effectively and feel confident about sharing lots of value with your customers for the right price.
Want some extra help?
We are now offering a limited selection of online 1-1 sessions to help with pricing. If you’re interested just drop us a email, we’d love to hear from you.