There is a bucket load of pricing mistakes women in business make, easy mistakes in that they’re easy to avoid! Pricing can feel complicated; it can feel emotional and confronting.
Pricing is one of those parts of business that people love to give advice about too. We all have that friend who sends all her mates your way so you can “look after them” which is code for “give them a super cheap price”. Maybe someone not so kindly suggested that because you work from home, you have no overheads, so you don’t need to charge a lot. You possibly even had the good old “hobby”, “side” business or my personal favourite (NOT) “little” business that suggests you’re not serious.
If you’re not serious, then you’re not going to have serious pricing, right?
Let me give you some advice to boost your confidence and fuel your fire for the next time someone tries to belittle your business by challenging your pricing. Here are five quick tips to get you started.
Prices too high or marketing efforts too low?
A lack of sales is more often about a lack of marketing and sales funnels, not a problem of high prices. Before you diagnose yourself with the curse of prices that customers aren’t willing to pay, let’s talk marketing. If you’re not marketing regularly and consistently, then there is a good chance your issue isn’t pricing.
How many people are seeing your offer?
Can I tell you how many times a Profit Lover decided to drop the price on a product or service that no one had ever seen? Lots. That’s how many times. Lots.
Every customer that views your product or service isn’t going to buy, that’s just the way it is. There will be a percentage that purchase the first, some that need to see the offer a few times and a portion that never buy.
What you need to know is how many people see your offer vs how many buy before you even consider mucking about with your price.
How long does it take for them to decide to buy?
Some products or services are a quick, easy decision. Very few people need weeks to decide to invest in a t-shirt or book. If you have a much higher price point, then it might take people a few weeks, months or even years to decide.
Dropping your prices too early in the buying process will rob you of profits you otherwise would be enjoying if you hadn’t cut your rates.
Low prices turn off the right customers and clients
Guess who loves low prices? Crap customers. Guess who gets super confused and suspicious when you’re prices are much lower than expectation or competition? Good customers.
When you price your product or service too low the people you want to buy from you will be turned off. We all have an expectation of what most things cost. When you charge too little, it confuses people or creates a “too good to be true” feeling.
If I ask you to design a logo for me, I expect somewhere between $350 and $850. If you offer to do it for $60 I will assume my logo will be some kind of template deal and not unique to me or it will be awful.
If you quote me $50 for a gorgeous birthday cake to feed thirty people, I will assume it will taste like rubber and cardboard. I will probably go to your competitor who charges three times as much as I will think they’re better, even when they’re not!
Price is part of your marketing strategy, don’t forget that when you decide to drop your prices.
If your target market can’t afford your price
they’re not your target market
Ladies love to underprice to keep other people happy (and wealthy) while they suffer from profitless businesses. If I had a dollar for every time someone said to me “my target market doesn’t have a lot of money/can’t afford to pay” I would wearing much fancier slippers right now.
Urgh.. I am so sick of hearing that excuse! Your target market CAN afford to pay a reasonable price. If your product is well out of their price range (i.e. you’re trying to sell BMW’s to pensioners), then you have your target market screwed up.
If your ideal buyer is continually challenging you on price or questioning your value, then you’re attracting the wrong customer.
Confusing people with confusing numbers
Pricing needs to make sense to your customer. Often we know our products and/or services so well that we can’t see how it could be confusing to others.
I have had clients with products that look identical to a customer but have a small design variation that results in a higher price for one style. This variance is so confusing for buyers. They can’t tell the difference between the products, and a confused mind says no!
Not sure if your pricing is confusing people? Ask someone who doesn’t know your business to check out your pricing. Does it make sense to them? Did they immediately understand your offer? You might be surprised just how many people don’t know what they get and how much they will be charged.
Too scared to increase prices?
At some point, you’re likely going to need to increase your price. Will it turn off some customers? Probably. Is it worth avoiding just for that reason? Absolutely not. Inflation causes the cost of all the materials, software and services we use to increase every year. That increase might only be around 2% which doesn’t feel like a lot, but it adds up fast. If you’re using services or purchasing goods from other countries, the exchange rates also fluctuate—another reason you need to be reviewing and adjusting prices as needed.
Perhaps your skill set has increased enough to warrant a price increase. I know mine certainly has over the years. I don’t want to be charging what I was ten years ago, now that I have developed so many tools and strategies to help women in business. The value of my offer is much higher than it was, I deserve to be compensated for that as do you!
Putting prices up can be awkward and may send a few clients or customers looking elsewhere to purchase. That’s ok! Your focus is to replace them with new buyers who can see the value in paying the prices you set.
How are you going to rate yourself when it comes to pricing in your business? Are you pricing to match your marketing? Have you just realised why you’re attracting budget seekers? Maybe you’re ready to stop telling yourself the “my target market can’t afford… “ excuse? Are you ready to finally increase your prices? I know I am!