“The business world is driven by the desire to increase three elements: market shares, sales revenues and of course, profitability. Pricing is the key player in any strategy concerning the growth of these three goals.” Mohammed Nosseir, Senior Marketing Adviser, Simon-Kucher & Partners, Middle East
Determining the pricing structure for intangible services provided is a real challenge for Solopreneur consultants. What is the value of our time and expertise in the open market? What if we promote our services, set the price and no one hires us? Should we lower our project fees? Can we ever raise prices?
Clients are motivated to spend as little as possible for the products and services that they require. However, they are known to pay premium prices when they “feel” that a particular product or service delivers exceptional value. That value can mean an expert solution to a business challenge; a long-lasting product that performs well with little maintenance; the ability to meet a deadline; or other factors that have meaning to the decision-makers.
Often as not, different clients will have different priorities that define what is valuable. It is the Solopreneur’s job in the initial face-to-face meeting to figure out what the client feels is important. That knowledge will achieve two objectives:
- You will know the expectations that must be met to justify a premium price.
- You will know how to price, based on the time or other resources that will be devoted to meeting and exceeding client expectations and you will grasp the urgency of client needs, which impact your price.
Most likely, there are standard benchmarks and signifiers of high-value service in your industry and these should be incorporated into your marketing and operations, along with other value-addeds layered on as necessary. Knowledge of what competitors do would be helpful as well, but it is difficult to learn how competitors deliver their services or price them. Nevertheless, it is advisable to choose three or four to research.
Visit websites to learn what services your competitors offer and how those services are described and packaged. Then, you can better identify potential competitive advantages for what you have and find a way to describe your goods.
It may sound like an obvious no-brainer, but part of your premium value-added that will be reflected in your pricing strategy should be your positive attitude and willingness to help prospective clients find the best solution to their business needs. Friendliness and the aim to genuinely want to offer good service go a long way in life and in business. Showing a good work ethic is likewise important.
For example when on an assignment, pay attention to emails. While I don’t recommend that one should be obligated to answer emails that a client dashes off at 3:00 AM (unless this is an urgent, high-revenue project), check emails through 8:00 PM and resume at 8:00 AM. If you can anticipate client needs, so much the better. They’ll think you’re 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 and confidence that lead to a respected brand (reputation) as you do. You will receive referrals from satisfied clients and you can also make referrals on their behalf, enhancing your brand each time you do. Good brands create good word of mouth and that supports and justifies premium pricing.
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… to maximize their profitability.”
Thanks for reading,