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The energetic side and the strategic side of pricing your product or service.
What is the first step in pricing your products and services? If you are just starting out, you might look at your competition and see what they are charging. If you are making something, you may look at what it costs you to manufacture it, including the cost of your time in the equation.
It may be a lifestyle question, where you identify what income you want left over at the end of a period and then reverse engineer the price or cost from there.
As usual, there are many ways to slice the pricing pizza pie which is good and bad. Good because you get to choose and bad because you get to choose–there are so many options.
Help is Here
I’m here to help tease it out with you. Pricing your product/service well is key to creating profitability in your business and that is what we all want, even if you don’t know it yet. You want to be profitable. Another key to pricing is that you get to control your prices. We don’t have control over a lot in some respects, but we do around our pricing. The third thing, it positions you in the marketplace, it is a part of your branding.
If you have been following my previous articles, you are getting to know that I believe that mastering your inner game of money, the energetics, comes before the outer game, the strategic side of money. Looking at the energetics of money from your point of view and assessing whether your beliefs are helping or hindering your ability to create money in your business is pivotal to growing your business and having a healthy relationship with money. This makes implementing the strategic side of money, the practical side of money, much, much easier. So, keeping in with my philosophy, that is where I will start. It provides for a much more robust price of your product or service and makes it easier to verbalize that price when you are asking your clients/customers to pay you.
The inner game of pricing your product or service.
The first question to ask yourself is, “What is my value?” or “How do I value myself”? I already can hear some of you saying, “Jeez, do we have to go there?”. Yes you do. Until you can recognize the value inherent in you and you are leading with it, you will have a tough time asking your customers/clients for the money.
So simple ways to answer, “How do I value myself?”
- List all the ways you are an expert in what you do or what you provide. If you write down 10 easily, stay with it and write down 10 more. This will expand your thinking and open the mind to more.
- What do you stand for? What are the top five values you stand for? And why?
- Get testimonials from past clients/customers who love your product or service.
Create a document that houses all this information, print it out, and refer to it often.
You are so much more valuable than you think you are. This means you are so much more powerful than you think you are in helping others, and being able to create the money and time you desire through your business. Recognizing your power through how you value yourself is paramount to a fulfilled and successful life.
The outer game of pricing your product or service.
Looking at the practical side of pricing your products could be a weeklong discussion, so in the interest of you flipping to Facebook and leaving me here to ramble on, I will touch on some key things to note when pricing your product from a practical standpoint.
- Get the total costs of creating your product. I emphasize the word total. I run into many business owners who forget to add in the cost of their time or their overhead when pricing their product or service.
- Get honest about how much really goes into your product/service.
- Look what your competition is doing. Look around to what others are selling their comparable service or product for and using the inner game tips above, price yours accordingly.
- Get feedback. Ask your potential clients or customers in a sales conversation after quoting the price, “Was that more or less than you were expecting?” If many of them are saying less, maybe time to increase your prices.
My caveat to all this: Don’t let all the pricing analyses stand in the way of putting your product or service out there. In other words, keep asking for the sale. You will quickly be able to zero in on what pricing works for you, works for your business, and works for the end customer/client.
Need more help with the inner and outer game of pricing and small business? Connect with me at [email protected] and stop making it hard to make money.