how to price your services

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Pricing Your ServicesPricing Your ServicesStrategies, Tactics & AttitudeStrategies, Tactics & Attitude

Mark SatterfieldGentle Rain Marketing

The impact of Pricing decisions The impact of Pricing decisions is often underestimatedis often underestimated

McKinsey study: Pricing has a greater impact on profitability than either sales volume increases, cost reductions or other improved efficiencies.

What we’re going to cover What we’re going to cover todaytoday

Setting fees/prices– Models– Mindset

Negotiating– Price comes up twice in the discussions.– How to determine if the person has money.

Pricing…more than just what Pricing…more than just what you charge.you charge. What prices say about your work Importance of having a pricing strategy

– Dominate a market niche.

However, we often approach pricing from the perspective of “It’s the primary reason people don’t hire us.”– Erroneous assumption– The research that has been conducted shows that it is not

among the top 3.– However…it is the most often heard EXCUSE for not

hiring someone.

Attitudes towards pricingAttitudes towards pricing

Pricing is more a matter of communication and ATTITUDE

You can always be under-priced so might as well stop using it as an excuse

Price is based on VALUE.– If you don’t communicate BENEFITS your price is

ALWAYS too much.– People are not as price conscious as they are VALUE

conscious

Attitudes towards PricingAttitudes towards Pricing McKinsey Study: “Sellers of services usually have a lower

perception of the VALUE of their services then the buyer.”

Gartner Study: “Most providers of services have more problems with their price structures than anything else-Customers usually have fewer problems with the price. Price resistance is almost always in the mind of the seller not the buyer.

Exercise…What is the value that others receive from working with you?

Worthiness– www.MarianMassie.com

Setting your priceSetting your price

Where in the market do you want to operate?– The reality is that prices are all over the map

VolumeExclusivity

Pricing model: HourlyPricing model: Hourly

Least effectiveTrading time for dollarsOk for entry level services.Bad for projects…not good for you nor

your clients.

Project Pricing ModelProject Pricing Model: : The MichelangeloThe Michelangelo

One price for you to do the work.Lower price for working with a member of

your staffMiddle price for working with a member

of your staff who is supervised by you.

Pricing model: Success fees. Pricing model: Success fees. Contingency arrangementsContingency arrangements

Pure success or retainer against success?The abandonment factor.How to keep people honest.

Pricing: AscensionPricing: Ascension

Entry level the price very low. Add components incrementally

Flow chart the process by which the client achieves success.– What will they need at various stages

Works best with a Bundled/Unbundled strategy

Pricing: Bundling & UnbundlingPricing: Bundling & Unbundling

A “component” approach to pricingHow it works

– Break you services offer into all of its components. Over the course of a year, what would the client get?

– What is the logical sequence?

GRM: Segment the marketGRM: Segment the market

Those who want to Learn – Desire for Knowledge

Those who want to Do– Desire for Results

90%/10%– The appeal of information products is to the 90%.

Pricing for the 10%. Pricing for the 10%. Components of MarketingComponents of Marketing1. Marketing message/Differentiation2. Creation of Free information article/report3. Development of one-page lead capture website.4. Autoresponder sequence5. Promotion of the free report

– Direct mail– Google/Secondary search engines– Articles (Article distribution services)– Trade shows– Co-registration– Speaking

PricingPricing

Bundled…$15,000 against 10%

Unbundled A…Individual components. Client self-selects what they need.– We do them for you (Price X)– We teach you how to do them (Price Z)

Unbundled B…We organize the sequence.– 6 months. March you through the drill.

Pricing Model: Pricing Model: Continuity/Forced ContinuityContinuity/Forced ContinuityBy once charged till disconnect.

– Memberships– Subscriptions– Eliminates renewal decisions

Forced continuity.– Buy product A, you are automatically enrolled

in Continuity Program B.– Advantages/Disadvantages

Negotiating Prices & FeesNegotiating Prices & Fees

But before we do… Next months Inner Circle program

– Email marketing Mailing Lists, Subject Lines, Avoiding SPAM filters, Email

in follow up, Text vs. HTML, 3 Different types of emails you need to send regularly to your group…

July– Mastering Trade Shows

Your ideas and questions are always welcome.

Determining if you prospect can Determining if you prospect can afford your services…getting price afford your services…getting price on the tableon the table Prices come up twice in the discussion (Helping

Clients Succeed. M. Khalsa) Have you established a budget for this?

– How much?– How were you planning on funding this?

3 part question– I don’t know how much this will cost you…– Others seeking similar results…– Can you see yourself falling somewhere in that range?

Overcoming price resistanceOvercoming price resistance When to discuss price

– Problem– Results– Then…Price

Loading up the “Balance beam”.– Communicating benefits…”Here’s what you get and

this is why it’s important to you.”– Other critical component of communicating benefits is

focusing on issues of fear/insecurity Thought it would be easier to get new clients Others seem to be successful, what am I doing wrong? Get leads but can’t seem to convert many of them. Would love to just be able to focus on the specific service I

offer…would like to have marketing run on auto-pilot.

Summary on PricingSummary on Pricing

It’s a much a matter of Attitude as it is Tactics. Different approaches you can adopt.

Naturally if you’d like to discuss your personal pricing strategy please let me know.