Closing while being Price-Competitive
It’s every consultants worry: how do I charge what I’m worth while still being competitive with so many buyer options?
Most self-employed people struggle with pricing their services or goods, especially in the beginning of their business.
There’s the dreaded impostor syndrome. Lack of good comps in your industry. Or, like us with web and graphic design, the constant competition with low, low overseas pricing. So, how do you close while staying competitive?
Well, first, as with every negotiation, you must focus on value. Sure, there’s likely going to be some other business out there that’s cheaper, but what do you bring to the table that’s better? What’s your unique identifier, your specialty, your differentiator? When you can sell your uniqueness, price becomes less of a factor. And, ultimately, if you get priced out, then it’s not meant to be. Working for less than your worth doesn’t produce a good product. You’re resentful and the client doesn’t get your best. Don’t fall into a scarcity trap.
Second, do local research. Know your market. If you’re in Manhattan, you’ll have a certain rate you can charge. If you’re in a small town, it’s important to be competitive. Meet with your fellow community members and see what an average price is for goods and services. You want your local community to be your business advocates; that starts by being fairly priced and adding value.
Third, do even more research! Look online to see the range of pricing for your services. Glassdoor and LinkedIn are good resources to get a range. You may have to adjust pricing for certain issues, but it’s important to know national averages. This can also help with client segmentation. You may have a niche out there that you weren’t aware of; utilize it.
Lastly, A/B test it. You’ll never really know your pricing sweet spot until you experiment. Throw some numbers out with different clients and projects and see how it goes. If you’re not closing at a certain price point, take it down 10% and see if that helps.
Once you find the right range, make sure to revisit it annually. Markets change and you may be outdated with your scale. An annual review will confirm if you’re targeting the right clients and charging accordingly.
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