How much is the service you provide worth? What do you charge people for your time, or for your work? It’s not about some finite equation, such as labor plus price of materials minus discounts and coupons. It’s not just about the time that it takes for you to get the job done. It’s all about the solution you are delivering to your clients. It’s about the value that you offer them. What is the real value of the what you provide?
In my Happiness book I share my story about struggling with finding the right price point in my fine art photography business. While I find artists and creative entrepreneurs often struggle with this the most, it applies to anyone who is in business for themselves:
One of the reasons I wasn’t selling enough to keep my business afloat was that I had priced myself out of the market. I had priced my art at a level that I was comfortable with when buying wall decorations. Except, in addition to some of my own favorite travel memories, my “wall art” consisted of mass produced stuff I bought in a big box store when I was still in college and had dragged with me for many years. Art collectors don’t shop in that price range, so over the course of a few years I increased my prices, and started to sell more and more. I realized I wasn’t buying; I was selling. Instead of pricing my work for an amount I was comfortable with, I had to learn how to price my work based on what my target audience was willing to spend, and the value they were getting in return.
From The Freedom Project Happiness
The pricing headache
Are there certain products that you refuse to purchase from your local dollar store? Of course there are. Chances are you’d rather buy your over-the-counter medications from the pharmacy instead of the Dollar Store because you perceive the Dollar Store to be a cheap store. We equate “cheap” with inferior, so when we have a painful headache, we’re going to an actual pharmacy. When you place a cheap price tag on your services, that’s just how you come across to potential clients, cheap and inferior.
Our decision to drive right past the Dollar Store to get to the pharmacy, when we’re looking for a good solution to our nagging headache, is also based on the fact the pharmacy is specialized in what you’re looking for (a cure for your headache). In this situation, we’ll pay more for the expertise that we can get from a pharmacist who may even be able to answer some questions. Some of them have actual clinics in-store. There’s a wide array of products to choose from, which are most likely to suit your particular needs, so you have choices. We can feel confident that one trip to the pharmacy will deliver results, and we want results now. We want that headache gone. When people see you as a solution to their issue, they are more than willing to pay you whatever that’s worth to them.
Now it’s your turn
Don’t be scared to apply a premium price to your services. Whatever type of creative entrepreneur you are, consider yourself to be the high-end version of that, and base your pricing on the deliverables that your clients get from you. Not only will your clients be reassured of your efficacy, you will feel more committed to the work that you’re doing for them when you are working at a higher price point.
Making more money sounds like a plan? Have a look at my growth hacking class in which I share other uncommon (but effective) strategies on setting yourself aside in your industry, delivering more value and building your business into an empire. Start with a complimentary preview by clicking here.