There exists an ever-increasing debate around the discrepancies between self-worth and net worth. The way a business prices its services affects not only profitability but its overall positioning in an already competitive market. Coming from the accounting and bookkeeping industry, Pricing within my arena is easier because it’s black and white. You give what you get and you get what you give.
But what about service industries where the measurement of output value isn’t as straightforward?
Services like communications, marketing etc. involve a lot of gray in the way that they value themselves. This becomes a bit of a problem especially when you deal with clients that come with exorbitant expectations.
The biggest challenge for businesses is charging what they’re worth. When clients come to me, I’ve found that their time is never taken into consideration when they consider the sales process. Social media clients of mine struggle with this because there’s an expectation that gaining a cult following is a hard and fast method.
Working with a variety of clients, I’ve found in the current monetary climate, businesses deal with cost and worth as if they are mutually exclusive. Whereas, in a creative-based service industry client expectation and agency output are treated as if they should be joined at the hip.
It’s honestly such a reversed attitude. In creative-based industries, what people expect and what they receive are often two very different things. Here you would be paying for a level of expertise you do not have yourself, but you can’t pay someone for their expertise then subsequently undermine them because you feel like you didn’t hit it big and now you need someone to blame.
Businesses need to work through three key issues before they go about setting up a price list for their services: self-worth, false expectations and instant gratification.
Ninety per cent of setting your prices is actually mindset. For service based-businesses, they find it quite hard to price themselves because of their feelings of self-worth.
In order to set your prices, you need to reverse engineer, so if you take what you want to pay yourself first and you reverse engineer everything backwards, you come out with a price.
Businesses instantly look at this price and go,” Well my clients are never going to pay this,” whereas what you really should be saying is, “You know what, I’m freaking worth that price” and so if clients don’t want to pay that then they’re not your ideal client.
It’s a blessing in a way because the way a client or customer reacts to your prices says a lot about how they are going to value your work. Essentially, if a client agrees to your price without hesitance there is an immediate level of trust and respect for your work that is demonstrated.
It’s important to surround yourself with clients that get it, not with clients were convincing them of your worth is half the battle and you’re constantly having to satisfy a thirst for instant gratification. Setting the right prices for your business services means knowing what you’re worth and who you want to work with, anything else would be a non-starter.
