I was chatting to a close friend of mine the other day on Skype about her business, and we were brainstorming how much she should charge for her initial consultation fee (she’s a life coach).

I asked her “How much are you worth?”

She scrunched up her face and said, “It’s not really how much I am worth, its really what the market is willing to pay me. I might price the consult for free and then charge a low fee for the first session so I can get a customer.”

Mmnnn, Interesting…

She didn’t equate her ‘price’ with her worth, her skill-set or all her valuable knowledge.

People have dramatically different ways of deciding on PRICE:

  • Some check to see what competitors are charging and they then charge LESS.
  • Some check to see what their competitors are charging and they charge THE SAME.
  • Some make it up based on how much the product/service costs them and how much profit they would ideally like to make.
  • Some more gusty people see what their competitors are charging and charge MORE.

Price is Elastic; it is what we decide it to be….

Does a Louis Vuitton handbag cost tens of thousands of dollars to make?
How does it really differ from a handbag from Target or even J.C Penney’s?

We are bombarded all the time with ‘everyday’ items that fetch waaayy more than the majority of their competitors.

It’s all perceived value, positioning and factors that are pretty much just made up.

So in saying all that, here are some helpful tips to keep in mind when setting your price:

Competing on price can be hazardous for your business, so differentiate your business in your customer’s eyes so price is not even a factor.

Be gutsy and less afraid of ‘losing’ customers if you set a higher price than your competitors.
As suggested above, differentiate by how you sell your product or service, how you market it, who you sell it to and how you package it all up.

Focus on bumping up perceived value in the eyes of your customer:

  • Can you position yourself as ‘the’ expert in a niche in your field?
  • How can you highlight your credibility?
  • How can you show off past client’s results and success?
  • How can you position the value of your product or service against a competitor?
  • How can you bump up your status to ‘celebrity’ in  your field?
    Can you interview celebrities in your niche and create the ‘brush-off’ effect?

Look at ways you can differentiate yourself from your competitors AND price your products/services at a price that reflects what you feel you are worth.

I do believe your prices reflect your confidence in yourself and your product/service.

I’d love to hear your thoughts on pricing and which strategy you’ve used, or intend to use!

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Nalisha Patel