It’s hard-hitting, and it’s true. When was the last time a client pulled you up on your fee and asked you to stop undercharging? It doesn’t happen. You’re not Bunnings or Officeworks; you don’t need to beat it by 10%. When you charge your fee, you’re pricing your services. There are three common methods to arrive at your pricing:
Retailer pricing. Cost of the service provided plus a location, negotiation and profit margin. So when a retailer tells you they’re selling it to you for below cost, they are most likely only playing with the negotiation margin. Most service based businesses rarely price this way, as most don’t know how much it costs to provide that actual service.
Competitor pricing. When the big retailers offer a price match, some will want a quote in writing. Most smaller businesses will take the buyers word as truth. There can only be one service provider in every market that is the cheapest. If you’re not planning on being the cheapest, then how are you planning to win?
Valued based pricing. Our fees are determined by the perception of what we can do. Backed by case studies, tactical evidence like your last 20 sales, great testimonials and of course strong brand awareness. With business like it is right now, the last thing you should consider is to discount. But that’s what poor businesses do when they panic. Never negotiate on your fee or cost unless the customer will use you. Make sure you find out why they want to use you, it’s the secret to building value.
If they can’t see the difference, they won’t pay the difference.
How Much?
It’s hard-hitting, and it’s true. When was the last time a client pulled you up on your fee and asked you to stop undercharging? It doesn’t happen. You’re not Bunnings or Officeworks; you don’t need to beat it by 10%. When you charge your fee, you’re pricing your services. There are three common methods to arrive at your pricing:
Retailer pricing. Cost of the service provided plus a location, negotiation and profit margin. So when a retailer tells you they’re selling it to you for below cost, they are most likely only playing with the negotiation margin. Most service based businesses rarely price this way, as most don’t know how much it costs to provide that actual service.
Competitor pricing. When the big retailers offer a price match, some will want a quote in writing. Most smaller businesses will take the buyers word as truth. There can only be one service provider in every market that is the cheapest. If you’re not planning on being the cheapest, then how are you planning to win?
Valued based pricing. Our fees are determined by the perception of what we can do. Backed by case studies, tactical evidence like your last 20 sales, great testimonials and of course strong brand awareness. With business like it is right now, the last thing you should consider is to discount. But that’s what poor businesses do when they panic. Never negotiate on your fee or cost unless the customer will use you. Make sure you find out why they want to use you, it’s the secret to building value.
If they can’t see the difference, they won’t pay the difference.
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