Tune in to listen to my interview with Adam Hommey during our conversation on the Business Creators Radio Show.
If you are here it is because you heard Adam Hommey and me talking on the Business Creators Radio Show.
Being an entrepreneur means taking risks…often BIG risks. You have to be fearless to be in business these days.
Too many companies fail because the leaders were playing it safe and afraid to take a risk.
But not you, right? You have what it takes to succeed.
Joining Adam is the fearless, Robin Waite.
In this episode, you will discover:
If you’re a fearless entrepreneur, tune in!
Pricing your product or service is one of the most important aspects of business. If you don't charge enough, you'll leave money on the table; if you charge too much, no one will buy from you. Pricing is more than just knowing how much to charge for a product—it's about understanding who your customers are and what they value. But that's not all there is to it; pricing is also about making sure your pricing fits into other aspects of your business strategy. To help you understand how to set prices right and make sure they stay there, we've put together this list of common mistakes that can ruin even the most promising B2B:
If you're a business owner, it's important to have a price that is fair to both the client and your business. You don't want to price too low, or your business will fail. But if you go too high with your pricing and no one buys the product or service, then again this will lead to failure of your business. So how do we find that sweet spot where we can make money but still keep our customers happy?
I believe there are three main pricing mistakes that most B2B startups make:
Simplicity in business is one of the most important things you can do to set yourself apart from your competitors. There are three main reasons for this:
You don't think about how to price your product or service.
You don't understand the relationship between value and price, so you price it based on what seems fair at the time. You might even charge less than other professionals in your field because you want more clients and think low prices will attract them, but this is actually not true. If anything, charging less could make people think of your services as inferior--they won't take them seriously if they're too cheap!
If this sounds like something that could be happening with your business right now, then let me explain why: Your pricing doesn't reflect who you are as a professional.
If you're not clear on the value of your offering and how much it costs to deliver, then you will never be able to price it correctly.
To figure out the value of a service, ask yourself these questions: * How much does this service cost me? * What are my competitors charging for similar services? And finally, if I were paying for this service myself (or with my business), would I be willing to pay that amount?
The fear of losing a client can be so intense that you'll give them a discount, even if it means taking less money than you need to run your business. You may also feel like charging more will scare off potential customers and make it difficult for you to find clients at all.
But what happens when you do charge fair prices? For one thing, the people who are willing to pay those prices will value your services more highly than those who aren't willing or able--and that's good for both parties involved! If someone doesn't value your service enough to pay the going rate (or even half), then perhaps they aren't the right relationship for either one of you anyway.
It's true that people don't buy products or services because of how much they cost; they buy them because of what they get in return. But if you're not charging enough for your products, it doesn't matter how good they are; people won't be able to afford them!
Value is what customers get from your product or service--the benefit that makes their lives easier, happier, or more productive. Price is how much it costs you to provide this value--your labor, materials and time spent creating something new (or making an existing thing better). In other words: Value = Benefits + Cost / 2
When you are pricing your services, it is important to understand the market you are in. If you don't know what other professionals charge for similar services, then how can you set your own prices?
You need to research your competitors' prices and figure out where they fit on the spectrum of high-cost/low-cost providers. Once this has been done, consider how much more value your customers will receive from working with you than they would from one of those other professionals (assuming they offer similar outcomes). Then use this information to set an appropriate price point that reflects both sides of this equation: quality vs cost; value vs price.
It can be hard to justify your price. After all, you don't want to undervalue yourself or overcharge for your services. But there are some simple steps that will help you figure out what is right for you:
You have to be clear about what you offer, and why it's valuable. You need to understand what the customer wants, and how they define value. The best way to do this is by talking directly with your target market--and then delivering on those expectations through your price point and product/service offerings.
You need to know your target market and understand their expectations. If you don't know what they are, then ask them! If you're selling a product or service that doesn't have any competitors in your area (like me), then this step isn't applicable for you. However, if there are other businesses offering similar products or services nearby and they all charge a similar price point for their offerings...then there's likely some research out there on what consumers are willing to pay for what kind of experience they expect when buying products/services like yours.
Once you know who your customer base is and how much value they place on what type of experience purchasing something from you will give them; then it becomes easier for determining how much profit margin should be included into every sale made through our business model - which helps ensure profitability over time even if sales slow down during certain seasons due to bad weather conditions affecting travel routes between cities where people live far away from each other geographically speaking but still want access
In conclusion, pricing is an important part of business, so take the time to learn how to do it right.
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This Scorecard has been designed to show Coaches, Consultants and Freelancers their blind spots and provide instant, actionable steps on how to increase their prices.
