What are you worth? – How to price your services for profit
May 2, 2012 in Blog, Featured, Headline
Across all our training courses the question I’m asked most often is, ‘How do you decide what to price your services at?’
When you’re selling a product like shampoo the pricing is pretty straightforward. Usually it’s a case of taking the cost price and adding a margin on for profit, known as cost plus pricing.
It’s not so easy when you are the commodity though. Many people base their pricing on how much they earned in their last job, or how much they’d like to earn per hour.
Another common strategy is to base your prices on what others are charging. This is known as ‘going rate’ pricing. This strategy invariably leads to everyone trying to undercut each other to get the edge. Of course all this does is drive the prices (and profits!) down for everyone. It also negatively affects the value clients perceive you to offer.
So how should you price your services?
If you read first few paragraphs again what do you notice about those pricing strategies? It’s all about YOU. And one thing that you should never do in business is focus on yourself. It should be all about your clients.
So turn it around for a second and start to think about what your clients need from you and what you’re able to offer. At what price can you afford to offer for these services? If you charge too little for your services you’re not going to be able to offer a very high quality service. Would it be better to charge a little more and offer a little more? Just asking
Now, think about the VALUE of what you offer and how that translates for your client. What will your client GAIN once they have used your service? A good client will be able to see your value and will be willing to pay what they think you’re worth. The problem with most people’s pricing is that it’s based on what THEY think they’re worth, which is nearly always lower than what it is in reality!
I’m sorry if you thought I was going to give you all the answers here. The truth is there is no equation for figuring this out. Start thinking differently about your pricing and the value you offer and you’ll be getting closer to what you really should be charging.
If you enjoyed this article, it is just a taster of the sort of thing you’ll be getting in the new ACEInspire course for Summer 2012. Sign up here to get the email on 8th May that will tell you all about it.






