In this article I am going to walk you through how to price your services to generate more sales.
Now for those of you who know me, you will know that I love structure and systems. So, I am going to share with you a system that you can use over and over again in your business to effectively price your services and make more money!
Brand Positioning for pricing
When it comes to pricing, people need to recognise that they are receiving more value from your service than what they are actually paying for it in order to feel satisfied. This is the key thing that needs to occur in your customer experience for them to walk away and sing your praises to everyone they know. Free marketing and social proof = priceless.
Another aspect to take into consideration is the psychological response that happens when someone comes into contact with your pricing. If we see something as being cheap then we question it’s quality, if we see something as expensive then we believe it to be of higher quality. If your service has loads of value and solves a problem for your ideal client then don’t be scared to push that price tag up! Do not damage the position of your brand by pricing too low. Another reason you should be pushing that price tag up is because when you make more money you can provide a better quality service to your clients. When you are barely making a profit (or worse, none at all) you are going to be hard pressed to provide your clients with a red carpet experience and your business will get lost in the noise and competition.
The Value Ladder
Make a list of the different services you offer. You want to create a ‘value ladder’. This is basically a list of your services in price order from lowest to highest.
The majority of the people will come into your business via the lowest tier offer or freebie. Some will go straight to the high end and some will come into the middle tier. It is good to have clarity around all your different offerings so that both you and your clients know what is on offer and where they fit and where they are ideally headed (up the ladder). At each offer stage you warm your client up a little more and nurture a relationship which in turn increases their know-like-trust factor of you and how your service solves their problems.
Pricing CEO Smarts
If you have too many services then I encourage you to try to narrow them down. Having too many options causes overwhelm and confusion and confused people just don’t buy. Try to bundle up your services or work out a structure for your services so that you can narrow down your offers and make the decision making process for your customer easy! In a world that is so fast paced we all love easy! Remember: the more value you pack into these bundles, the more appealing the offer and the happier your clients will be.
Now let’s be practical. When looking at the pricing of your services you need to take into consideration your overheads. I’m talking about all the costs of running your business such as your website hosting, your email provider, your team members, your rent, your welcome packs, your internet bill, Facebook ads e.t.c.
If your expenses are higher than your conversions then you are quite literally throwing your money away. Know your numbers! Your business will not thrive if you do not know them.
I recommend not pricing your services in round figures. What I mean by that is that it is better to price your services at $207 instead of $200. Why? There are loads of studies out there that show higher conversions when pricing is done this way. It looks like a psychological process goes on in the mind of your customer when they see pricing done this way. Perhaps they feel that you have made more of an effort to be accurate but who knows really. The data is there and who am I to argue with the numbers.
Another interesting thing I have come across… Is that including the numbers 7 and/or 9 in your pricing also have a positive impact on your marketing. Again, there are lots of studies done on this and you can check some out here and here.
The biggest brands all do it and it obviously works for them!
At the time of writing this these big brands are pricing like this:
- Apple – iPhone 12 – $1,199
- Nike – Air Max 20 – $170
- Jay Shetty – Certification School – $675
- MindValley – $99
So now we have gone through the system for pricing your services, I encourage you to implement. Go back and review your current pricing structures. If you need to put up your pricing and are worried about upsetting your current clients. Offer to keep them on the old pricing as a thank you for being part of your business. All new clients coming in go on the updated pricing structure.
If you need support in packaging up your services, structuring them to be irresistible to your ideal clients then I can support you to do that. I have helped hundreds of clients to package up their services into high-end offers that sky-rocket their income. I did it for my own business and doubled my income within a single year. Book your Business Freedom Call with me today to find out how.