There is no law, nor ethical imperative that says you must charge two clients the exact same amount for the same services.
Your services are rarely identical and the value perceived by those respective clients will always be different.
Part 2: Value is in the eye of the beholder – the client’s eye.
Add Value to Your Services
Value-Based Pricing is a pricing strategy, which rather than on the cost of the product or historical prices, sets prices primarily on the perceived or estimated value to the client.
When successfully used, value pricing can significantly improve your profitability due to setting higher prices without impacting on costs.
Value-based pricing is based upon an understanding of client value. In most circumstances, gaining this understanding requires primary research, such as industry benchmark surveys, which indicate the client’s ‘willingness to pay.’
When you put a value on something, it becomes valuable.
How valuable are you?
Exploring how to add value to your offering requires creativity, innovation and a willingness to think outside the square.
Businesses with highly differentiated deliverables command a premium.
Ask yourself the following questions:
• Is the client talking to other agencies?
• Do you possess some unique expertise or history?
• Do you have access to the latest technology?
• Have you been referred to the client by a trusted source?
• Are you known within the industry or do you have a unique reputation?
• Are you available at the right place at the right time?
Everything can have value-added.
3 ways you can add value to your service or product include:
1. Providing expert advice and a tremendous level of professionalism – If you are the ‘authority’ in your sector, then you are expected to be more valuable than that of your competition.
2. Bundling and packaging – Simplifying buying choice by offering bundled price deals.
3. Transition and education – Provide ‘welcome’ or ‘transition teams’ to help and enhance the on-boarding phase.
Identifying how your services are different to your competitors, and knowing where clients see value, gives you the opportunity to develop a price, which reflects value beyond cost.
Ultimately, value pricing takes confidence – you have to believe in your service or product, otherwise, what’s the point?
To read more about gaining the most value from both your ideas and services, download my latest eBook ‘How To Value and Price Ideas and Servies’ www.kathrynsmint.com.au/ebook.