December 15, 2022

A Few Sure-Fire Ways to Know the Pricing of Your Services is Off (or maybe just flat out wrong)

–You’re pricing by the clock.

Why?  Hourly pricing is just one input, and clients have no idea how long your “thing,” whatever your thing is, takes to do. They’re interested in comparing the bottom line of the proposal or invoice to their notion of the value of the outcome you generate. How long something takes to do has nothing to do with the value clients place on the outcome of your work.

–The content you generate and share is more about yourself and your services instead of the client challenges and problems you solve.

Why? Because that focus, on deliverables and outputs, invites clients to think transactionally about your “thing” and how much it costs. If you’re communicating about client problems, how and why they happen, and value clients realize as those problems get solved, then you’re seen as a professional of high value. It’s easier to see you as an investment which leads to a return, vs. a dead cost.

–You’ve “benchmarked” your pricing to the competition.

Why? If your competition bills by the hour, for example, their pricing is wrong (see above). If you’ve benchmarked to what they're doing, by definition, your pricing is wrong.

–Every client pays the same price.

Why? Different clients have different values. Some clients want more of what you offer, some less. Some, in turn, have no problem paying more for more of your work. Others are "price first" shoppers.

–You feel like you’re working too hard for too little money.

Why? You’ve got too many clients at the wrong price.

–Thinking a lower price will attract more business and draw clients to you.

Why? Because prices can act as marketing signals to clients. Depending on your service and how you price, they can signal inferiority, causing your best fit clients to avoid you.

--You're running too many "specials" and offering discounts right and left.

Why? Because you're conditioning client to think solely about your price and wait for your specials. (Assuming they see you as a quality service provider--see above.)

–You haven’t raised your prices in years.

Do I have to explain this one?

 

 

Image created using Craiyon (Formerly DALL-E Mini)

(This blog post was also posted on LinkedIn.)

©Ray Business Advisors, LLC and John Ray

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About me: I help solo or small professional services firm owners with the confidence and positioning necessary to improve their pricing and change the trajectory of not only their business but their life.

I have a podcast called The Price and Value Journey, which features interviews with industry leaders and audio versions of my blog posts. You can find the podcast on your favorite podcast app.

I also have a book coming out in 2023:  The Price and Value Journey: Raise Your Confidence, Your Value, and Your Prices to Grow Your Business Using The Generosity Mindset.

For more information, go to PriceValueJourney.com