How to Charge a Premium for Your Services
As a small business owner in Westchester, NY, how do you charge a premium for your services? What if your potential customer or client thinks you’re too expensive?
And if price is a reflection of value, how do you show your prospective customer the value in the services or products you offer?
In the words of Warren Buffet, “Price is what you pay, value is what you get.”
Simply put, value is seen as two things:
- It’s a great price, when the value exceeds the cost.
- It’s too expensive, when the cost surpasses the potential value.
It’s a careful balance getting the right compensation for the work you do, while getting your prospective client to agree on your pricing. You don’t want to charge too much and lose these possible clients, but you also don’t want to under value the services and products you offer by pricing too low.
On the flipside, if you never have clients tell you that you’re too expensive, you’re probably not charging enough.
It’s a great price, when the value exceeds the cost.
Everyone wants a “deal,” so if you follow these 3 basic rules, your potential customers/clients will see that they’re getting the right “deal” for the right price.
3 Rules to Follow that Warrant a Premium For Your Services:
1. Offer Added Value
What added value do you bring that your competition doesn’t offer? People are most likely going to shop around to get the best price. If your price is higher than those offering the same product or service, you’ll probably hear about it. You need to make the potential customer aware that working or buying from you is more valuable than the lower price from your competition.
77% of US online adults say that valuing their time is the most important thing a company can do to provide them with good service.
Talk to your customers about the key benefits of your product or service, and why they should choose you. Steer them away from focusing on price and make them see the bigger picture. Help them understand that this is a long-term solution, and that what you’re offering will not only improve their performance, but will also reduce their overall cost and liability in the long run.
Finally, in order for your potential client to believe that you’re worth paying more for, you actually have to believe it yourself. This is crucial when defending your pricing.
2. Set Budget Expectations
What is your potential client’s budget? Giving a potential customer an hourly rate or monthly retainer cost, may scare them. Asking them what their budget is upfront will allow you to work with a concrete number on what they can afford. This number will tailor your answer to what they can expect to get from you for that amount.
Clients who don’t have a budget are typically not ready yet and may not be worth going after.
50% of leads are qualified, but not yet ready to buy.
Asking their budget initially will determine how serious they are about their need for you.
3. Don’t Waste Time on the Cheap
What do you do about cheap customers and clients? Unfortunately, those who insist on cheap prices, will always be cheap. You’re better off not wasting your time on these types of clients because they’ll be your worst clients, and eventually drain you of all your time and energy. They’ll never understand that the price is right because the value is there. Always go with clients who know value and are willing to invest in your value.
Other important tips to remember when offering a premium for your services:
- Inform them about positive reviews and feedback you’ve received from other customers or clients to prove the worthiness of your product or service.
- Offer peace of mind in the great customer service they’ll receive. This puts their attention on why buying directly from you is the way to go. 55% of consumers would pay more for a better customer service experience.
- Lastly, when being challenged on your pricing, always keep it friendly and professional. 83% of consumers are comfortable making a referral after a positive experience. This client may not work out this time, but they might be a good referral for other possible clients in the future. As it’s said, “Don’t burn any bridges.”
Looking to the future…by 2020, customer experience will overtake price and product as the key brand differentiator.
Are you now confident and ready to charge a premium for your services? Stand firm, and follow these rules, and you’ll get the customers and clients that are right for your business.
We offer many services at Exceller Marketing including all areas of Marketing Communications and Business Development such as marketing plans, business plans, brand strategy, sales promotions and more. Whatever your need is, we begin by clearly identifying what makes you unique, crafting your marketing message and defining why customers should buy from you. Feel free to contact us today for more information, as well as a FREE consultation.
For more on how to acquire new customers and clients, visit our blog “Drive Sales 24 Hours a Day.” Here you’ll learn how your website is one of your greatest assets in selling your business.
Best regards, until next time!
Exceller Marketing is a full-service marketing firm and website design agency servicing small and medium businesses, as well as entrepreneurs in Westchester County, NY and the tri-state area. With powerful traditional and digital marketing communications, coupled with business development, we keep our clients ahead of their competition.
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