03 Dec Pricing your product or service
Too many service-based businesses charge on an hourly basis. They treat themselves like a contractor. If you’re a service business, your services can be ‘boxed up’ and priced similarly to a physical product.
Stop charging by the hour and start pricing on the positive impact you have on your client. You should be charging based on the outcome, and your prices should reflect the benefit and gain that your services offer.
I spoke with a business owner who was struggling to make a go of his business. He was charging his industry’s average hourly rate, but delivering the results in half the time. This meant he was earning half the industry average per client.
Had he been charging a job rate and not by the hour, he would have earned the same per client as the rest of his industry, and in half the time. In addition, I pointed out that people will pay more for the same high-quality job completed in less time.
I suggested that he could be twice as expensive per result compared to his competitors because he was getting the same results in half the time. This would 4X his earnings per client and 2X his earnings per hour! Overnight, he’d become one of the most highly paid people in his industry, giving the same great service he was already providing.
Be smarter with your pricing. See yourself as a business and your service as a product, and price accordingly.
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