Profitability Pricing Strategies To Make Money

Profitability - Pricing Strategies to​ Make Money
At a​ meeting the​ other day,​ a​ marketing consultant opened her talk by asking the​ group,​ What are you​ worth? She went on​ to​ discuss all the​ different ways we minimize our worth or​ discount our value in​ desperate attempts to​ close the​ sale .​
After all the​ pitfalls of​ pricing and selling were laid out,​ she closed the​ talk by asking again,​ What are you​ worth? the​ responses around the​ room were very entertaining as​ people began to​ realize or​ give themselves permission to​ adjust their prices to​ make a​ profit!
As a​ wakeup call for your own business,​ I​ want to​ give you​ some options to​ consider ensuring your pricing delivers the​ profitability you​ deserve .​
1 .​
Educate your customers .​
When prospects approach you​ or​ calls/emails you​ for an​ estimate/quote,​ this is​ a​ buying signal .​
They are telling you​ they are ready to​ buy and willing to​ spend money to​ purchase your expertise .​
- Provide superior service and they won't look elsewhere and won't blink at​ your price .​
Excellence is​ priceless .​
2 .​
Many prospects perceive value and price as​ equal .​
a​ lower price can actually hurt your credibility and sales because they associate the​ best quality products and services with premium pricing .​
Listen to​ your customers .​
- Do some competitive research and be sure you​ are not shorting yourself .​
3 .​
Periodically calculate your profit margin to​ be sure what you​ charge,​ after expenses and overhead,​ pays you​ a​ good living .​
Covering expenses,​ overhead and payroll is​ not enough .​
4 .​
Periodically do the​ numbers to​ be sure that the​ actual cost/hour and price/hour give you​ the​ necessary profit margin .​
Your daily rate may sound reasonable .​
But if​ you​ bill for 7 or​ 8 hours and put in​ 12 -14 hours,​ you​ may actually be paying yourself less than your lowliest employee or​ intern .​
5 .​
There are ways to​ keep your prices fixed to​ maintain value and yet be flexible .​
Add the​ flexibility by designing different bundles of​ services or​ different packages of​ hours/month or​ hours/project to​ be contracted .​
6 .​
Set your fees just a​ bit above what you​ feel comfortable asking for .​
Then,​ bump them up incrementally until clients complain or​ you​ stop getting reorders .​
7 .​
When asked,​ be upfront about your prices,​ and then zip it .​
Do not apologize for your prices,​ defend your prices,​ or​ justify how you​ derived the​ price .​
8 .​
Yes,​ there are strategic times when negotiating a​ price is​ in​ your best interest .​
For example: a​ unique packaging of​ services for a​ new type of​ client,​ or​ the​ pilot or​ beta testing of​ a​ new product or​ program .​
9 .​
If you​ still think your initial consultation/sales presentation with a​ client should be for free,​ set some boundaries and expectations and clearly state the​ value and your investment in​ preparing for that initial consultation .​
Another way to​ approach this is​ to​ charge for the​ initial consultation at​ your full rate and if​ they purchase your product or​ service,​ that fee gets applied to​ the​ final invoice payment .​
10 .​
If you​ close the​ sale and get paid on​ that one sale but provide value-added services of​ following up in​ a​ number of​ ways,​ are you​ losing money from the​ opportunity costs? Maybe you​ can charge a​ small premium to​ provide stellar customer service .​
Clients will value it​ more if​ they have to​ pay for it .​
You have to​ appreciate what you​ are worth before your clients will .​
Decide what you​ are worth in​ the​ marketplace .​
Be sure your fee or​ rate has a​ profitability factor built in​ .​
You are worth it.

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