I wanted to hop in your inbox today and talk to you about something that a lot of clients of mine have a problem with.
This is pricing.
One of the main questions I get asked as a web designer and strategist is: I don’t know how much I should be charging? And should I put my pricing on my website? Or should I have people book a free consult and then I tell them about my pricing?
Let’s get into that a little bit more in depth.
Pricing your products and services can be a little bit tricky.
Because depending on your target market, and how you want to position yourself in that market will influence the decision you make of how much you want to charge. But you also have to take into consideration the time, effort and expenses that will go into delivering your products and services. Oh and remember you gotta think about your income goals and the upfront investments that you have made to get this business off the ground. (Hence: Tricky)
Now, because the purpose of this post is to help you figure it out your in between sweet-spot with pricing and what would best work for your business to succeed.
Let’s break it down like this…
Next time you want to increase or decrease your pricing, ask yourself these 5 questions to help you price for profit and reach your income goals.
- Who’s my target market? Is your target market high-end customers who would pay for a more expensive product/service because they would see it more valuable. Or are they a low-end customer who is looking for the cheapest product/service because they prefer to save some money, even though they won’t be buying the highest quality product/service.
2.How do you want to position yourself in the market? Do you want to be High-end business with a low volume of customers, or a low-end business with a higher volume of customers? Think about it like this. If you have a high-end price for your product/service you’ll just have to sell a less volume of clients to reach your income goals. If you have a low-end product/service you’ll have to get a higher volume of clients to reach your income goals.
3.What are your income goals? It can be obvious that you want a business that helps you make money, and you may not want to limit yourself of how much you make. But setting an income goal for your business is what will help you move forward much faster.
Because depending on what that goal is. You’ll be able to price your products/services without undercharging. This is what we often tend to do. We start an online business and we want to make money, but we never stop to think about our income goals. This leads us to undercharging and then feeling incongruent with why are we not making more money in our business.
4.What are the expenses to deliver your products or services? When coming up with pricing you need to take into consideration that there will be expenses in order for your business to fully run.
You must put on the hat of a CEO and keep track of your monthly subscriptions, how much you’re paying your team and how much you want to pay yourself. And yes, paying yourself is an expense. Learning how to separate yourself from the business is very important when being the CEO of your business.
5.What upfront investments have you made to get your business off the ground? Have you been putting time and effort to create a product? Or is there any upfront work that you have to do to onboard a client before you even deliver your service. Think about the upfront time and effort that you’re investing in your business.
If you don’t know how much time it takes for you to create a product or deliver a service, I suggest you start tracking your time. You can use a time tracking app for this. (I use toggl.com) I start tracking time from the moment that a client books a free call to concluding a project. Tracking my time and knowing how much time I actually spend with a client has helped me know if I’ve been undercharging or I’m charging more than what I worked for.
Ok. so now that you know this. All you have to do is work on these questions. Knowing where you stand with your target market and how you want to position yourself will give you a starting point for your price point. When you add in all the other factors, like your income goals, your expenses and your time and effort. That’s what will help you land on your sweet spot.
Now the last question that I want to answer on this blog post is: Should I put my pricing on my website or should I have people book a free consultation and then I tell them about my pricing?
There’s no right or wrong answer to this question, and here’s why.
You’ll want to add your pricing to your website depending on your type of business and how you want to run your business.
For example: If you have a low-end product/service and you don’t need to see if someone is the right fit to work with you, then yes. Add your pricing, this will help your customers decide if they want to pay the price without going through loopholes.
On the other hand if you need to know if the person that you’ll be selling to is the right fit for you and the price point is high-end then you’ll want to let them know when they get on a free consultation with you, after deciding if this is the right client for you.
But here’s the catch. When you decide to not show your prices on your website. There could be a 50/50 chance that you’ll get more inquiries for someone who’s not a perfect fit, because they might be interested in learning more about your product/service but not be the ideal client who will buy your high-end product/service.
So in this situation, I would prefer to show your prices, even if it’s high-end. Then add a quick questionnaire before getting on a call with them to determine if they would be the right fit for your product/service. I choose to do this for my business. Again there’s no right or wrong way to do this.
And it’s really up to you.
Now, How did today’s post help you with your pricing? And are you currently showing or hiding your prices on your website?