The Biz of Pacelinebiz

Turning things on end to achieve results!

Pricing Your Services

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I was recently in a roundtable discussion about how to address pricing for a service company.  This is a very good question, one that is agonized over by many in the service industry.  I put myself in that category.  What you have to stop yourself from doing is immediately stating your hourly or daily rate.  Don’t be put on the defensive by this question.  It is a fair question to ask but the correct answer in many cases is; it depends.  If you went to a mega-sized auto lot and asked the salesperson how much does a car cost he could tell you $12,000 or $112,000 depending on the make, model and options.  It is best to turn the tables and ask them some questions first.

One of the most important reasons for turning the tables and asking questions is to make sure you are not competing on price alone.  Make the focus YOU since you are most likely your brand and therefore brand loyalty translates into loyalty to you.  Read more about building your brand.  Shift the focus from price to value.  Educate them during your interaction of the value that you bring to the table.

In my case, I can tailor my services to fit into the budget of the customer.  If they have a smaller amount to spend they will have to decide what they need the most and “shop” accordingly.  As a service provider you need to be flexible enough to offer a menu of items and to be able to break down the task or project into small enough pieces so you can guide them through the process.  I caution you to know what things they can do own their own.  There may be certain aspects that must be done by you alone due to their critical importance to the project’s success.   As an example, if you were building your house, the contractor would probably be fine with letting you paint the interior of the house but would draw the line at you laying the foundation.

The reason you want to ask questions is to get a scope set for the type of service they are looking for and then detailing the steps to be taken to complete the requested service.  Typically, once you do this you will have educated the customer as to the size of their request.  Frequently the amount of time needed to complete a task is greatly underestimated by the customer.   You can overcome the “sticker shock” to some extent once they understand what you have been asked to do for them by having a detailed plan.  You should always document this in writing so you can easily turn that into a contract for your services.

Please think twice when a customer asks about the price of your service.  Have a great week providing value to your customers.

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Written by pacelinebiz

November 26, 2012 at 9:02 am

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