Your pricing is made up.
There, I said it.
I was probably the first one to say it to you too.
No matter what you charge, there will be plenty of people who are NEVER going to pay it and there will be plenty people who’ll gladly pay double.
The goal of pricing is to charge as much as someone is willing to pay for your service and you simply won't know what this is until you ask.
Yes, that’s right, you’re going to have to put on your sassy pants and ASK!
MORE THAN ONCE!
The goal is to ask so many times that you can begin to see a pattern developing as to what people will pay for what you do.
This is called VALUE BASED PRICING.
(Don’t worry, I’ll teach you in another post how to increase the value so that you can earn more, but in the meantime…let’s continue…)
Also in good conscience, I need to warn you that it’s wise to consider your expenses and margin for growth too. There’s no point charging a fee when you’re making a loss!
So, let’s make sure this never happens to YOU…
Repeat after me…
“I [INSERT NAME HERE] promise Shawna, and myself, that I will never...EVER operate at a loss”.
There’s a great guy from the UK, Phil Jones (go read all his books) and he shares this story about when he was a kid and used to wash cars.
He said that he charged $3.
So he charged $3 and decided to raise it 50 cents - nobody batted an eye.
Then he decided to raise it to $4 - some people grumbled.
Then he raised it to $4.50 and he realized at $4.50 there was a lot of backlash.
Whether you’re washing cars, knitting jumpers or washing cars while knitting jumpers, you have to experiment with the pricing to see how much people are willing to pay.
“This is all sounds great Shawna, but it would be really helpful if you could give me a simple way to find my ideal price…”
Well, isn’t this your lucky day? :)
THIS IS HOW YOU CAN HIT YOUR OWN PRICING SWEET SPOT in 2 SIMPLE STEPS
Ask yourself two things:
1. How much would my favorite client be willing to pay for the thing I offer?
2. Then after after the service is rendered, ask how much they would have paid for it, knowing what they know now?
Is the answer different? Why?
If you want extra Shawna bonus points, go one step further:
2.5) Ask specifics about what would make them pay more, even if it’s just a little bit more?
You wanna know what will increase the value in the clients eyes.. Because of the simple value equation:
The higher the perceived value = the higher the likelihood of commitment/The more they are willing to pay.
Determining your pricing is a VITAL market research question and it can start as easily with these 2 questions.
So, put on your brave knitted jumpers and go and ask!
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