Lesson 2 From My Australian Ventures – Pricing

My recent ventures around Australia heralded many questions.

If you missed last week’s post and content here it is again.

These Two Common Themes Existed For Each Business Person

Another major question from my clients was…

“How do I price my products and services ?”

Now of course this is a question easily answered with, ‘It depends.’

But that…

doesn’t help any one.

So here is my slant on how to price your products and services.

First…

Do not worry about what your competitors are doing.  I have always thought this way to price is dopey.

Let me explain…

The fee you charge should be in direct proportion to the value you provide to your customer.

Did you notice I said YOUR CUSTOMER.

Who cares about what your competitors charge.  Your customer has nothing to do with your competitors.

It is you who has overheads and fixed costs and it is you who has to place bread and butter on the table for your family.

And it is YOU who is solving your customers problems.

What this means is it is you and only you who should set your fee structure.

Let me take this a step further.

If you wished to manufacture handbags or sell them.  How much do you make them for or sell them for?

You see… it depends but did you know…

You can buy handbags for over $100,000.

Yep…

And I bet they didn’t care what their competitors are doing.  They found a market, they make them and they sell them.

Take a look.

hermes_bags.png

These bags are made because there are people who can afford them and for whatever the customers personal reasons are for owing one; the Hermes company is glad to offer the bags at ‘their’ prices.

But there is a catch.

Your product or service cannot be the exact same as your competitors.

What I mean is…

If you sell a can of coke there are millions of other retailers selling cans of coke.  It is the same product except probably the location.

Yet a can of coke from a service station is often more expensive than a supermarket but a customer has a thirst when they fill up with petrol and will pay the higher price.

This is what we call price differentiation via location.

Or in other words there is a distinction why the product should be more costly at a service station.  The petrol fumes made you thirsty and you need a drink now !  So you will pay the extra cost.

For your products or services you have to ensure there is a recognisable difference between what you offer and what your competitors do.

In other words…

People really do not buy the products or services you offer.  They buy the benefits your products and services provide.

Here is how I explain this to my Tradie Clients to be different from other tradespeople quoting for a job.

  • If you set a time to quote a job.  Be on time;
  • Change from your work shirt (even if this means taking a fresh shirt to work);
  • Splash a little cologne on.  (don’t have body odor);
  • Have your first name embroidered on your shirt or carry a name badge;
  • Turn up in a clean car – (wash it before you quote if you have to);
  • Place an industry membership logo on your quotes.  It will help build trust;
  • Don’t bag your competitors (but it is OK to point out your difference);
  • Use phrases such as, ‘Unlike other trades people we…;
  • Leave customers with as much info as you can.  Often the buying decision
    will be made after you leave and your paperwork may seal the deal.

Of course there are many other tips I give but these are just a few which will help win the quote at YOUR prices.

So the answer to the question…
“How do I price my products and services ?”

Is complex yet simple.

How much value you provide to your customer will be in direct proportion to how much your fees can be.

How do you price your products and services?
I’d love to find out.

Let me know.

Believe in Yourself

 

 

About Kurt

I'm passionate about helping people in small to medium businesses get BIG results from email marketing. Email Marketing is about 1. Your List 2. Your Relationship With Your List and 3. Your Offer. When you get the three in unison, watch your profits soar. If you're not sure what I mean. Contact me. I can and will help. Believe In Yourself - Kurt

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