Do you realize that your pricing sends a million messages to your prospective clients? Pricing is every bit a part of your marketing strategy. And no, I’m not talking about being the cheapest provider—that is always a losing proposition for both you and your clients. And here’s why:
1. What is your pricing saying to clients about you, your skills, your services and/or products? If you price too low, clients will view you as merely a commodity they can get from anyone, anywhere else. Low-ballers think that by pricing low, they will create even more opportunities to find clients. However, what it really does is open them up to an even bigger pool of competition–and not particularly good company (remember what they say about the company you keep). It’s a losing game and they have to work doubly hard just to get noticed and break even.
On the other side of the coin, clients correlate higher fees with higher skill and expertise. They expect to pay professional level fees where that’s the case. If you aren’t charging professional level fees, they innately think the skills and experience must be sub-par.
2. What kind of clients does your pricing attract? Cheap prices are a lightning rod for cheap clients. And cheap clients are the very worst clients to work with. They don’t value the work, they’re constantly trying to get something for nothing, and they nitpick and find fault with just about everything you do for them. Cheap clients are unprofitable and energy-draining to the extreme and cost you far more than you realize in your business.
You want to market to clients who have foresight and seek to invest in quality and expertise. These are the clients who understand that quality and expertise are far more valuable to them—and ultimately cheaper in the long run—than short-term cheap prices. They value the work and skills because they know how those things, in turn, help their own business move forward.
3. How does your pricing affect your operations and systems? If you have a complicated pricing structure or turn everything into a transaction, it makes it more difficult for clients to deal with you. And difficult, complicated and confusing is not good marketing. When your pricing and, thus, billing structure and procedures are complicated, you create even more administrative work for yourself. Whenever you have overly complicated, burdensome overhead and administration, that ultimately ends up detracting from your client service in one way or another. Simplicity is the name of the game. When you make your business easier to run, you make it easier for clients as well—and you have more time to serve them.
Likewise, if you aren’t charging enough, your business will not survive. You simply must charge profitably in order to stick around and continue to serve the clients who come to depend on you. You aren’t doing anyone—not you and not your clients—any favors by not earning well. Because your money problems will eventually affect your business and trickle down as service problems for clients. Pricing well is imperative for your business survival and the ability to create conditions that allow you to provide superior service to clients. And you can’t buy better marketing than the kind of word-of-mouth that is generated from that!
To learn more about positioning your business with proper pricing and how to avoid the hourly billing trap, get my guide How to Price and Package Your Support Based on Value and Expertise–NOT Selling Hours!