“The business world is driven by the desire to increase three elements: market shares, sales revenue and, of course, profitability. Pricing is the key player in any strategy related to the growth of these three objectives” . Mohammed Nosseir, Senior Marketing Advisor, Simon-Kucher & Partners, Middle East
Determining the pricing structure for the intangible services provided is a real challenge for Solopreneur consultants. What is the value of our time and experience in the open market? What happens if we promote our services, set the price and nobody hires us? Should we reduce our project fees? Can we ever raise prices?
Customers are motivated to spend as little as possible on the products and services they need. However, they have been known to pay premium prices when they “feel” that a particular product or service offers exceptional value. That value can mean an expert solution to a business challenge; a durable product that works well with little maintenance; the ability to meet a deadline; or other factors that have meaning for decision makers.
Often different customers will have different priorities that define what is valuable. The Solopreneur’s job in the initial face-to-face meeting is to find out what the client feels is important. That knowledge will accomplish two goals:
- You will know the expectations that must be met to justify a premium price.
- You’ll know how to price, based on the time or other resources that will be devoted to meeting and exceeding customer expectations, and you’ll understand the urgency of the customer’s needs, which affect your price.
Chances are there are standard benchmarks and high-value service indicators in your industry and these need to be incorporated into your marketing and operations, along with other added value layered as needed. Knowledge of what competitors do would also be helpful, but it is difficult to learn how competitors provide or price their services. However, it is advisable to choose three or four to investigate.
Visit websites to learn what services your competitors offer and how those services are described and packaged. Then you can better identify the potential competitive advantages of what you have and find a way to describe your products.
It may sound like an obvious no-brainer, but part of your premium value-add that will be reflected in your pricing strategy should be your positive attitude and willingness to help prospective customers find the best solution for their business needs. Kindness and a genuine desire to provide good service go a long way in life and in business. Displaying a good work ethic is equally important.
For example, when you’re on a task, pay attention to emails. While I don’t recommend being obligated to answer emails a client sends at 3:00am (unless it’s an urgent, high-revenue project), check emails until 8:00pm and resume at 8:00 pm AM. If you can anticipate customer needs, all the better. They will think you are a hero and will be happy to pay for the pleasure of doing business with you.
Step by step, client by client, focus on exceeding expectations on every project, building the trust that leads to a respected brand (reputation) like you. You will receive referrals from satisfied customers and will also be able to make referrals on your behalf, improving your brand every time you do so. Good brands create good word of mouth and that supports and justifies premium prices.
As Mohammed Nosseir concludes, “Pricing has been, and will continue to be, the most complicated element in the marketing mix family…A proactive pricing structure will help companies…maximize profitability.”
Thank you for reading,
kim