So How Should I Set My Prices?

I hope I have persuaded those of you who provide services of a professional nature, and whose goal is to create valuable transformations for your customers, that charging on a cost-plus basis or for your time is seriously harming the profit both you and the customers will get out of working together.

I also hope I have demonstrated the folly of setting your prices somewhere in the middle of your competitors' prices, plus the profit limiting results of charging the same price for the same service to all customers, with no heed to the value each individual will get out of that work.

But the question remains, how to price your services?  In case you have missed the point so far, don't price your services!  Price your customers!

“In case you have missed the point so far, don't price your
  services!  Price your customers!”

How?  Well here are ten things to consider when it comes to 'pricing your customers'
* Perceived substitute solutions - How many other ways do they have available to fix
   the problem
* Unique value - What do you bring to the party that is so valuable, no equivalent exists
* Cost of switching supplier a later date - What would it cost the customer to start again
   with someone new
* Difficulty of making comparisons - Can anyone else put together a value package that
   allows any sort of comparison
* High price equates to perceived high quality - Do you come across as a Rolls-Royce
   where the odd few hundred pounds is neither here nor there?
* Absolute and relative expenditure - Is your proposal different enough when examined
   in both ways?
* Ultimate benefit or value outcome - How large a chunk of the customer's overall value
   goal is your work going to deliver?
* Whose money being spent on whom - Is the customer spending someone else's money
   on a third party, or their own money on themselves?
* Fairness of pricing - Do you continually come up with chargeable extras or are there
   reductions available for larger bundles?
* Storage capacity - Has the customer got the ability to take advantage of your bulk
   purchase offers?

All of these need exploring by great questioning in the sales conversation.


Professional Service Providers who charge for their time or their materials, or whose prices are influenced by their competitors can find out how to get paid what they're really worth at www.davidwinch.co.uk/sws_emp.htm