What is the right price for your service? The “right price” is whatever your target market is willing to pay once they know the unique value your product or service offers. Pricing is one of the most important decisions in the development of your business, and it’s important to do your research.
Cost vs. Value
When thinking about pricing your service, it’s important to understand the difference between cost and value. Cost means how much is needed to produce and deliver the service. Value is the perceived benefit of the service to the client. Prices are based on value. The goal of your marketing is to communicate this value to your audience.
Research the Market
A good way to come up with pricing ideas is to examine the market and see what other coaches and consultants are charging for similar products. This gives you an idea of what people are willing to pay, but also helps you set a standard for pricing. You can set your price just under the competition’s or position your product as the luxury version and set the price higher.
Know Your Target Market
Get to know your audience well. Create an Ideal Client Avatar based on information obtained through market research on your potential clients. Part of the avatar includes their buying behaviors and attitudes. This will tell you how much they’re willing to spend. This research will also reveal which problems your audience is suffering from so you can position your services as the solution to these problems.
Your price should at least cover the costs of the time it takes to create and deliver your packages. One way to start with pricing is to figure out your monthly costs, and then add in the profit you want to make for each client. Combined with your marketing research on customers and competition, you can find the right price that will make your offering both profitable and a good deal for your clients.
Test the Market
There are several ways to test the market with your pricing. You can hold focus groups where you present a few select audience members with a sample service and get their opinions on how much they’d pay for it. You can also offer a soft launch to see how many people sign up at your chosen price.
Offer Flexible Pricing
One way to solve the pricing problem is to offer a number of pricing options for your client. This is a win-win because it gives them more choices and helps you sell more.
You can create different levels, from Basic to Deluxe. The lower levels have fewer features and a lower price tag, while the higher levels offer more value at a higher price. Another flexible pricing option is to offer bundles of services together. The bundle is priced lower than if the customer bought each individual product alone. This would of course depend on what you are offering.
Start Considering Price Early
Don’t wait until the last minute to start thinking about price. When you are first thinking about starting your business, start thinking about how you will price your services and do the research.
Come join the conversation around pricing in my Facebook Group, Master Your Coaching Biz.