Keep It Simple, Stupid. It’s such a common phrase, and when considered in retrospect, easy to see. But when you’re in the thick of it, perhaps not so much.
Here are four pricing considerations for your offerings. Follow these and ensure delight and client acquisition. Ignore them, and encounter frustration and client abandonment.
1. If you’re not worth it, you can’t charge it. There’s simplicity to this, and you should be honest (to yourself and the client) about the benefit you’re providing. Why can’t you charge more? Because either (a) you don’t believe it and the client’s bullshit detector will light up during negotiation, or (b) you’ve overpromised on value and underdelivered.
Neither’s a good idea.
2. Your pricing might make sense to you, but does it make sense to the client? Challenge your pricing’s assumptions: If you charge hourly, why? If you charge a flat rate, why? Is there a client-centric reason for charging for some options and not for others? Articulate it. Does it make sense from the client’s perspective, or do you have to stumble all over yourself to explain it? Pretend a client has asked you why you charge what you charge, and respond speaking to yourself in the mirror. Practice until you, in your heart, feel comfortable with your answer. If you sound like a politician non-answering a question, you still haven’t gotten it.
3. No one cares about what you need to earn a profit. Some price based on what they need to make a living. But that’s the wrong way to price, because it doesn’t take into account the value your client assigns your product or service. If you’re a consultant, this may be something you can measure. If you’re a creative, it’s much more subjective but is based on your work’s sui generis and in some cases, your wisdom. In all cases, it’s based on the experience you create for your client.
And while you have to pay attention to the market, your rates should be based on the value they give your client. If this value isn’t enough to make a living, you need to go back and reexamine your offerings, your processes, and and perhaps your cost structure.
4. Too many choices is bad. Remember, you are the expert. You are the one your clients come to, trusting you to solve a problem or create an amazing piece of art. If you force your clients to make any more choices than absolutely necessary, especially if you’re not guiding them through this process, you’re doing them a disservice. And making it harder for them to stay a client.
The ideal is of course to simply give them one choice–to hire you. It’s very difficult to achieve this for most, but if you can narrow down the available choices to as close to one as possible, it makes life much easier, not just for your client, but for you.