Easy Pricing Strategies to Determine Your Rates
It could just be the most difficult decision you’ve ever had to make: what do you charge?
You have to understand the competition, your own skill set, what you interpret as your skills (yes, for most of us this is different from the former), what your customer is going to pay for, your location and a host of other variables. Working it out may feel like a hurdle that you can’t get past yet.
There are of course some techniques that you can use. One common approach is to use a calculator like the one found on Time Freedom Business at Melissa Ingold. These can tell you very easily what to charge for achieving your income targets, and they’re a great place to start.
But what about all of the other issues? Having a sound pricing system demands that you dig a little deeper. Take a look at your starting number, then:
Your Competition. It may require some detective research, because many coaches and service providers are not publishing prices. So you can work it out if you pay attention to their blogs and social media, ask some polite questions, and get on their mailing list.
Nonetheless, be honest about who, exactly, is your competitor. Don’t over-sell or undervalue yourself. In other words, make sure that you compare yourself to another company who has the same expertise, market and track record, rather than just looking at who you’re trying to be.
Your Skills. It is simple in some industries. Certifications and educational programs exist that allow you to charge a certain fee, by virtue of having achieved them. If you have followed that route, it will be easy for you to determine your price. If not, take a close look at what can reasonably be listed as a skill.
Look at your track record as well. Have you proven yourself and have the testimonials and case reports to show for it. After working with you have your former clients continued to call you back for more work? (That’s a good thing!) These are all reasons for maybe seriously considering a higher price point than you would have considered earlier.
Your Market. It’s the business that has the ultimate say in the game of setting prices. Like any student of the first year of economics will tell you, the price of something lies where the buyer’s willingness to pay exceeds what the seller is willing to accept.
If your goal is to continually chase new clients/customers and hope that they will pay top dollar without ever using you before, that means you can look forward to low paying gigs sadly. That’s not a bad thing— everybody has to start somewhere— but it needs to be understood. On the other hand, if you’re target market is more developed and economically stable, then not only is a higher fee warranted — it’s a must.
They will expect a higher price, and will not find value in the lowest-cost provider of anything, whether it’s coffee beans or Painting.
Ultimately, don’t forget the price never gets set in stone. It is flexible. You can also adjust the prices if you notice that you are attracting the wrong customer (or no business at all). Working too hard for not enough return? Raise your rates.
It’s your business. You get to call the shots.
