NickVenturella.com 3-22-15

Pricing

March 22, 2015

I get asked about how to price one's product or service all the time. In fact, it's a subject I constantly seek others' thoughts on too.

Pricing one's product or service is a difficult task. It's a unique balance between the value you provide to your target market, the value they perceive from what you provide and their willingness to pay for it.

One thing I've noticed (and this is not a hard and fast rule, just my own observation) is the more how-to information you can provide your audience at a low cost seems to attract buyers with less ability to pay. These are folks that want to invest the time to do it themselves because they don't have a lot of extra money to pay someone else to do it for them.  With these folks, it’s not that they don’t want to pay, it’s just that they don’t want to pay much.

On the flip side there are many businesses and industries where the ability to pay is there and they are too busy or too focused on other aspects of their business to do certain things themselves so they are looking for a solution that solves that problem for them.  More often than not, they're looking to outsource and simply have someone else do it for them. That in part, is why they have a willingness to pay -- they see the larger value in it being done for them so they can focus on the core competencies of their business.

Then there is a third camp. These are the folks that don't have the time nor the money.  They neither want/have time to learn how to do it themselves nor do they want to pay for someone for the how-to information or to do it for them.

These are the folks that often trip you up leading you to second guess your pricing strategy.  When you go to market with your pricing, try to avoid dealing with these folks -- they'll likely never be satisfied with any price, and they're likely a time-suck as a client if you do convince them to buy.

On the other hand, if you put your pricing out there and you have several conversations that your product or service seems great, but folks just can't afford it, you may need to beef up your ability to communicate the value of your solution -- why is it worth the price you're charging. How does the investment in your product/service further the client's business in a positive way?

Conversely, if you’re getting so many orders that you can’t keep up, you may have priced your product or service too low, and you end up trading more of your time for little pay.  In this scenario you may want to consider raising your prices slightly and communicating more value points about your product or service to help justify the price increase.

Pricing is a lot of educated guessing.  You have to research your target audience, the pricing of other similar products/services in the marketplace, take into consideration your time involved in delivering the product/service and/or any costs to produce it.

Once you determine a price, you put it out there and market to your target audience about the value for the price point and you see how it lands.  That’s really the best advice I can give on pricing.  Then talk to as many folks as you can who have an interest in your product or service and gather feedback to figure out if and how you need to adjust your pricing strategy.

If you are considering altering your product or service pricing, consider a pricing strategy, outline the value of your product/service to justify the price and have 10 conversations this week via email, face-to-face over social media, whatever, to simply gather feedback about how your pricing is perceived in the marketplace.

This is an on-going process.  Eventually, you’ll figure out the best way to price your product or service based on your experimentation and experience.

Thank you,

Nick Venturellawww.nickventurella.comwww.nickvmusic.netwww.growloop.comwww.tinycareer.comP.S.  Want help understanding how to work like you're on vacation?  Check out this course from Chris Brogan (affiliate).