Do you know how much you are worth? Do you know how to work it out? Often businesses that provide services can find it a challenge to work out how much to charge. If it’s just your time, brain power and experience how do you put a dollar value on that? The only way you can truly know is by what people are prepared to pay for you.
- The Customer Determines How Much You are Worth
Here’s the thing. The only person who can determine your worth in the market place is the customer. They are the ultimate decision makers in determining your value and only they know the price they are prepared to pay. In an ideal marketing world you’d be able to continue to put up your price until you stopped getting customers and then adjust it back down until they start coming again. This is not always a wise practise as it can confuse the market place.
- Find Out What Your Customer Thinks
It is important to identify how much you are worth to your customers. What kind of value do they put on your and your services? The best way to do this is by conducting customer research, listening to the feedback customers give you or by conducting a question and asking. Although it’s important to note that asking the direct question you want to know the answer to isn’t always the way to get the answer.
- What Do You Bring To Your Customers?
- Identify what you bring to your customers that can be measured.
- Are you saving them time? If so, how much time?
- If you are saving them money, how much money?
- Are you making them money? If so, how much money do they make?
You can then put a dollar figure on the time you save them, the money you save them or the money you make them.
Some businesses look at competitors and see what they are charging and then choose to price higher or lower based on their own perception of how they compare to their competitors. There is a classic problem with doing this. Firstly, it’s your own perception not what the customer thinks, secondly you don’t always know how your competitor has structured their business. They may have lower overheads than you or different profit centres to you. It is important when noticing differences between you and your competitors that you are different in a way that the customer values and will pay for. If you are just starting out and don’t have any identified competitors and are just wanting to price your first job then some factors to consider are:
- How much experience have you got – how does this experience help the customer?
- How does it enable you to be efficient or superior in your delivery?
- Clearly someone who has no experience cannot charge the same as someone who has a lot of experience.
- Formal qualifications are not always necessary however they need to be factored into the price so should relevant industry professional development courses.
- What do your qualifications enable you to do for your customer that is of value to them?
- Have you got qualifications that were difficult to gain or few people have achieved. This really only applies to qualifications that relate to the area you work in now.
- Have you developed specialist skills either through training or experience?
- What do these skills enable you to do that others can’t?
- Tradespeople often underestimate the value of their skills. Knowing how to cut materials effectively can save time and money because it’s done correctly the first time.
You may just be one of those lucky people who have extraordinary talent in your field. Think of some of the incredibly talented male and female actors. They can charge a high price because they really do have something above everyone else. Be honest with yourself – if you truly have talent – then charge for it.