GETTING YOUR PRICE RIGHT.
Whether you’re a small business who sells a product or service, setting your pricing can be one of the biggest challenges. Get it right and you’re loving business life, but on the flipside – the flow-on effects of undervaluing yourself and not charging enough can be incredibly damaging.
We asked the SA Woman community to share their top tip on pricing, and the answers flowed in about money mindset, pricing psychology, valuing yourself and your offering, your target market, accounting considerations, and much more.
Here are 17 ways to set your price and own it.
Warida Wholistic Wellness
“Someone once told me, all you need is for one person to pay your price and that gives you confidence to continue to charge that.
I look at what I bring to the service I provide and the huge change I facilitate. In my case, people are getting far more than just one relevant qualification and experience.
I also strategically analysed my market and looked at what others were charging for similar services. I also let NDIS guide me on some of my prices (which is more than I would have charged!).“
Facebook: Warida Wholistic Wellness
Head to Heart Health
“I was asked this question today and I told her:
I like to write 3 prices down and just ask what price feels right to me. Just ask
“Truth, will this price contribute to me and others?” The one that feels light is the one to go for.
“Truth, is this price fun for me?” works too. And, I just got with the price that has the right energy for me
Also, when I started out I went with a price I knew felt right to me but I had a block to charging it, so I gifted people with vouchers that were the difference between the “right price” and the price I felt I could charge, that way the service was still worth $x.xx but I was only receiving $y.yy until I felt I could receive the full price.“
Facebook: Head to Heart Health
“After reading countless articles on the psychology of pricing, my favourite fact is that psychologists discovered that items of even pricing had a higher perceived quality over odd pricing.
Interestingly, these even priced items were also perceived as being more expensive.“
Facebook: Kara Lambert
Social Media Supermum
“When pricing your online information products, the value of the perceived product in the client’s mind needs to be worth a minimum of eight times more than the price of the product.
For example, your entry level product should be priced between $17 – $30 (value of that product = $150), your mid-tier product should be priced between $99 – $130 (value of that product = $300 – $500) and your high tier product should be priced between $300 – $1000+ (value $5000+).
If you have problems structuring your products this way then consider changing the way you have structured your online course or breaking up the information into sub modules.“
Facebook: Social Media Supermum
Kelly Hody Mkt Etc
“Once you’ve set your pricing, make it visible to potential customers. List it on your website so people can easily find it. If your pricing varies, use a “starting from” approach and make it clear that the package can be customised, upgraded, etc.
Most of your potential customers will already have a budget in mind and will have researched price before they consider buying your product or service. If your price is higher than someone’s budget, they’re not going to buy from you anyway.
But if you don’t have pricing on your website, people may be reluctant to enquire simply because they don’t know whether your pricing is going to be within their budget or not. This is particularly true for services which don’t have clearly visible price anchors in the marketplace.
If your key competitors have pricing available on their websites, pricing on your website gives potential customers the opportunity to compare pricing against their perceived value of your respective offers. If your key competitors don’t have pricing available on their websites, you gain a competitive advantage. It’s a win/win scenario.“
Facebook: Kelly Hody Mkt Etc
Relaunch My Life
“I write in my book about how to value yourself and your time by calculating things you love to do in your life – and asking yourself how much would someone have to pay you to take that thing you love to do out of your life?
This is so important to make sure that your price is based on the VALUE you offer rather than the time spent etc.“
Facebook: Relaunch My Life
“I think it’s very important to understand your market and in particular, to understand what your market are willing to pay for your services.
If your prices are outside the range of your market, you won’t sell anything!
If you understand your customers and what they are willing to pay, you can then work backwards to see if your offering will make you the return/profit you desire.”
Facebook: Fusion Accountants
“Price based on your value not what your clients can afford.
But having said that, things like payment plan options and having multiple price points ensure there is something for everyone.
My products range from $7- $7000. There is something for everyone at the level they are ready for.
Also one of my favourite affirmations is “People love to pay me and are excited to pay me every day.”
You have to shift the way you think about receiving money to truly feel aligned to the prices you are charging.
This is why money mindset work is so valuable to business owners.“
Facebook: Sexy Selfish
All in Advisory
“Pricing your product or service can be confusing. Do you go cost plus? Going rate? Charge per hour? Value? Premium? Penetration? Skimming? Loss Leader? So many to choose from!
My number one hot tip …
ALIGN YOUR PRICING STRATEGY WITH YOUR WHY, VALUES AND STRATEGY – EVERY TIME!
If you have a premium quality product then you would follow the value or premium pricing models. If it’s low cost and high volume then follow the cost plus or going rate pricing models.
Things to watch out for:
1. Cost plus – Find out ALL your costs (cost of sale + portion of overheads) and then add margin
2. Going rate – Research, research, research and research some more – customers & competitors. Analyse your conversion rates.
3. Charge per hour – For service based businesses value your time – assign yourself and team members charge out rates and stick to it! Stop discounting.
4. Review your pricing at least annually and increase gradually where need be
Pricing can be uncomfortable – but be bold about your value and your product! You are not a charity and for all your hard work and the risk you have taken on you deserve to make a profit.“
Facebook: All In Advisory
Brentalls SA Chartered Accountants
“For services, price upfront wherever possible even if it needs to be a range such as $1,500-$2,500 if you are unsure on the exact scope. Agreeing this in advance is a relief for both client and practitioner.“
Facebook: Brentnalls SA
“Be confident in your pricing. Our motto is “price is what you pay; value is what you get”.
Communicate the value and benefits your clients will receive when engaging your services. You can’t be everything to everyone so don’t try to be.
Your ideal client will appreciate and value you; so don’t be shy. Be transparent with your pricing to weed out the tyre kickers. Say it loud and proud.“
Facebook: Tammy’s Table
Resolved Wellness & Behaviour Centre
“Setting your price point is a matter of knowing your worth. When you know your worth, you don’t short change yourself.
By confidently expressing the worth of what you offer, and not allowing self doubt and fear of missing out make you discount it, you are setting boundaries – for yourself, and your clients.
By setting and maintaining boundaries, you are demonstrating your worth to others.“
Facebook: Resolved Wellness & Behaviour Centre
“When selling services or products, have two options – one standard and another one slightly above option 1 with an extra mini- add on resource.
For example if you are selling an e-book for $10, give a second option ( ebook + a video on a related topic) for $12. Most people will pick the second option as it’s a no brainer. And you can earn 20% more without doing any extra work.“
Facebook: Brain Glider
“Having a comprehensive look at your costing template for what you want your business and earnings to look like, combined with what you know your value adding proposition is – is key.
The more time you can spend on this (plus a regular review) means that you can be confident of quoting, and in responding if someone is not prepared to pay that fee. This process has given me confidence in charging accordingly. I find that I’m much more engaged with the client then too!“
Facebook: Compass Collective
Jess McEachen Copywriting
“Do your research and make sure you’re not undervaluing what you do. And also make sure can own your price point, so you don’t feel you have to change it to give someone ‘your best price’. Just do that upfront.
Also, be wary of discounting! For one it devalues your offering, and secondly it can have a big impact on your end profit.
This is something that stuck with me from a numbers workshop – where we were shown a sliding scale that for every % discount you gave, what affect that had on your profit, and then how much extra you needed to sell to compensate.
Think of ways to increase the value – or to simply point out the value you do provide.“
Facebook: Jess McEachen Copywriting