Pricing strategies: How to price your services
I’ve made plenty of mistakes when it comes to my pricing strategies for my services, and my clients report the same challenges. It’s one of the biggest issues faced by soloist service providers.
The pricing dilemma
The ongoing lesson for me is mindset. Quite simply, if I don’t value what I do, neither will my clients. Determining that value and defending it without being too defensive? That’s much more complex.
Putting together a proposal recently for a service that’s beyond what I normally do, but in an area I’d like to be going more work in, my dilemma was twofold: yes, I want more of this work, but no, I don’t want to be seen as undervaluing my service.
As I sat sweating over what to charge my potential new client, I kept hearing her words, ‘It would be great to come in at a good price as there might be more work.’
Despite the sweat, something made me step back. ‘Hang on’, I thought, ‘if I’m feeling clamped down on price before I even quote, how will I feel halfway through the project?’
And what does a good price mean anyway? I asked the client what she deemed a fair price, and she said she had no idea. Okay, time to exercise some price leadership.
"If I’m feeling clamped down on price before I even quote, how will I feel halfway through the project?"
Service pricing strategy and proposal structure
The strategy I opted for started with telling the client my regular fee to establish my worth. I then gave her a slight discount in the interests of a long-term relationship.
In my proposal I included a list of inclusions to remind us both of the benefits the end client will receive. If there’s one thing many of us soloists do it’s underestimate our own value and overestimate that of others, so writing a list of benefits isn’t just good for the client, it’s also good for me.
You might decide not to include all the benefits you bring (or time you spend) in your final proposal, but sometimes the very act of writing this list reminds you about the value of what you do, the time it takes and the results you achieve.
I’ve also clearly listed exclusions, letting her know I’m more than happy to quote on those down the track.
The outcome? The agent hasn’t objected to the price, I’ve positioned my service at the premium it deserves, and I’ve also shown that I’m willing to give a little flexibility without cannibalising future sales.
Want more articles like this? Check out the pricing strategy section.
Factors to take into consideration
To determine the full scope for myself and the tangible benefits for the client I now ask more questions more often so I meet their needs without losing sight of my own value. These include:
- What specific outcomes do they require?
- What is their budget?
- How can I clearly demonstrate all the benefits they’ll receive?
- What are the tangible deliverables they receive as a result?
- What is my time worth?
- How much time will this take me?
- What is the lifetime value of this client?
- Is the rate I’m considering charging in line with the going market rate?
- What’s my unique selling proposition with this offering?
- How does this position my services in the eyes of the prospect?
Not all questions are right for all occasions, but by asking your client and yourself more of these with each proposal, you’re far more likely to end up getting a rate you’re happy with.
Pricing is an area where many soloists sell themselves short, especially in the early days of being in business. Do you have any experiences or advice to share about service pricing strategies?