The bill you charge for your services can often make or break client relationships. Pricing is one of the most influential factors that encourage customers to buy your product. This calls for careful consideration of where your service or product stands in the market, and whether you are undervaluing your service.
Basic evaluation
The easy starting point is to first analyse how much time and money is going into meeting a client’s needs. This simple step can reveal tasks within the process that are repetitive and unnecessary, which can then be addressed appropriately to make your work day more efficient.
Visualising the resources used for every client and your expenses, and comparing them to industry rates can help price your services more accurately.
Product value
Being swamped with work but little to no money in the bank is a telltale sign that you should be charging more. Understand the market your business operates in – this may hint at clues that you can use to determine your price point. Your service might save clients money and time, or make them more money than their initial investment in the project. These increase the value of your service, which means you should be charging more for improving their efficiency.
Pricing structure
Payment options that you offer to customers can change how your work day is scheduled, and may also make you more money for offering the same service. If you are targeting smaller businesses that are likely to have a limited budget, hourly rates are more suited. However, for clients with bigger budgets, an hourly pay structure may be inefficient – as high quality clients focus on the outcome of the project over the cost of your service.
In these cases, you may want to consider value pricing. This is a more complex pricing strategy where you must clearly understand the value your business brings to the market, and the value of your personal knowledge and skills. However, this means you need to be skilled at estimating how many hours a project will take. Knowing this helps justify and reward your value for what it’s actually worth.
