The Pricing Mistake You Won’t Recover From [Free Worksheet]
When I started my business in 2009, my first instinct was to offer a discount on my services to get my foot in the door. When someone was looking for a VA on Twitter, I forwarded them my pitch along with a discount coupon. I gained a lot of clients that way but not one of them is still with me today.
What made my “marketing” blunder even worse was that people weren’t even asking for the discount. I just happily offered to do my work for less than what I knew it was worth.
WHAT DOES DISCOUNTING SAY TO YOUR CLIENTS?
When you see a pair of $200 shoes you’ve been drooling over marked down 50%, does it make you wonder what those shoes are really worth? Even at $100, the store is making a profit so if you wait a few more days, will they go down to $75? Hell, go for the gold and ask the manager for a deep discount and get them for $50. Suddenly, those exclusive high-end shoes are nothing more than what you find at Payless Shoes.
THERE’S ALWAYS SOMEONE CHEAPER
If your main plan of attack is to always be the cheapest, start digging your grave now. There is always someone who can and will do the work cheaper. Creating brand loyalty will be impossible in a constant price competition.
Think about it: do you always buy the national brand in the grocery store if you can get the same quality and taste from the knock off brand that’s half the price? Is there any brand that you would ALWAYS buy no matter what?
COMPETE ON PRICE WITHOUT CUTTING YOUR THROAT
Yes, there is a way to compete without discounts. Yes, there is a way to say no to low pay.
You know when you see companies bundling products and services or giving you a free bonus with purchase? They’re adding value instead of discounting their offerings.
Is there a way that you can offer a freebie instead of a discount, something that gives real value to your client? A free e-book, a helpful worksheet or even a trial membership to your forum?
SO, HOW DO I PRICE MY SERVICE?
Your basic pricing structure is cost plus profit. But there’s much more that goes into it.
Like how many billable hours you’re able to work, what your salary is going to be, what kind of overhead you have, the taxes, fees and association membership you have to pay, and maybe most important, the “deliverables” of working with you. You know, what your client gains from working with you.
This services-pricing-worksheet will help you get started. For more on priging your products and services, check out Priceology!
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