Client Magnets Blog

That’s one question I am asked over and over by clients. Whether it’s how to price a product or how to price your services, this is something you have to be definitive and decisive about. You have to be able to tell your prospective buyers how much it’s going to cost them to sign on with you.

My answer is usually in the form of a question. “How much do you want to make?”

I’m not trying to be cagey with that response. But, you really are the best person to determine what you need to make in order for an exchange to be worth your time.

This is one of the first things I learned from one of my own mentors, Yanik Silver.

He doesn’t make decisions according to what the market is doing. He doesn’t rely on external references to determine his pricing. He does it totally internally.

What do I mean by that? If you are pricing your products or services according to what you think people will pay or what other people are charging, that’s pricing externally.

Try instead to think about the project you are planning. Think not only about how much time you are going to put into it, but how much energy and effort as well.

Consider your total involvement in the venture. This is how you begin to set your price internally.

Then ask yourself, “How much do I want to make from this?”  Jot that down on a piece of paper.

Next ask yourself, “If someone is to use my solution and they apply it in exactly the way that I’m telling them to apply it, what would it do for them?”

This is an important question, because it’s all about value – the value you are giving to clients and the value of what they are receiving.

Yanik’s philosophy is, “I am wealthy because I enrich others 10 to 100 times the value of what they pay me.”

So, you must reflect on the difference your product or service can make for your clients.

If you find that what you are offering benefits clients in a far more lucrative manner than it does you, you can set your price at the higher end of your rate. But, you should also consider something else.

Try rethinking the presentation of what you’re offering. You might find yourself heading in a somewhat different direction than you originally intended, but it could be well worth your while.

I mentored a client who had an amazing process by which he helped businesses win contracts. When we first started working together, he was fixated on the idea of having an e-book. He was helping major companies win contracts to the tune of millions of pounds and he wanted to put all of his expertise in an e-book that would sell for £50.

What we came up with instead was a way that he could deliver this same information to groups by packaging it into a high-end workshop. I can tell you that the price points were much, much more than people would have been paying for an e-book.

I recognize that in these tough economic times, individuals and companies alike are cutting back on their budgets. As much as this may tempt you to lowball your price, don’t fall into that trap.

Your next challenge is to demonstrate and prove your value to clients. The issue is more about how you sell it than whether or not they’ve got the budget. If you can show someone that they are going to save $300,000 by investing in your product or services, they will find the $20,000 to pay for it.

So, while you are establishing price points for different projects, keep your mind open to the possibilities of presenting them in various ways.

Don’t trade your diamonds for dimes. Set your price based on what you want to make and what clients stand to gain.

Bernadette Doyle is a small business marketing expert. Get more tips and advice at http://www.clientmagnets.com