Do you think the quality of your service is greater than the price your customer pays for it? Then this article is for you!
Many freelancers and agency owners are unsure when it comes to pricing their services and often end up lowering their prices to close another sale, hoping that this new client will bring them other work in the future to make up for the (poor) price charged.
There are many pricing strategies. However, here I will address value-based pricing. Let’s understand how it works?
Price is a matter of perception!
Have you ever wondered why some of your competitors can sell much more expensively than you? How do they manage to convince their canada phone number list customers to pay double or even triple the price you charge? Well, to explain my point of view on this a little, I’m going to tell you a professional “story” that happened to me at the second company I worked for in the first half of the 2000s. I learned a lot there!
I had a boss who gave us a lot of freedom to learn within the company. And, since I was the agency’s (web)designer, he allowed me to participate in many of the meetings with clients. During the meeting, after he talked to the client and explained how the process works, it was time to give the budget. And, lo and behold, the client asked:
– And how much will this website cost me?
My boss would smile, put on a nonchalant face, turn to me and ask, as if he were asking me to spread the margarine during breakfast.
I barely opened my mouth to respond, and he turned to the customer and repeated himself.
– Oh, so-and-so, about 10 thousand is fine. Is that okay for you?
Unbelievably (to me at the time), the client responded:
– Okay, go for it!
At the time I charged 30 or 40 times less than that to make a website!
Well, lesson learned, let’s put it into practice! At the time, in addition to working at this agency, I also did freelance work to earn some extra money, so I took the tactic to my sales meetings.
After many meetings selling cheap, I began to understand that the difference between my sales and my boss’s was the perception that clients had of the professional “boss”, owner of an agency, and the self-employed “Cadu”, a new and insecure freelancer.
Today, I believe that customers build this perception based on two main factors:
Value Assignment and Trust
Value Attribution is how much the customer is willing to invest in time, effort and money and exchange all of that for your product or service.
And Trust is the level of certainty the what should a Python developer have? customer has that they will, in fact, receive what they believe they are buying.
Value and trust go hand in hand, with one criterion influencing the other. And both are just a customer’s perception, and may or may not correspond to reality. So much so that in the “story” I told, both websites, the one I sold and the one my boss sold, were technically the same.
Brand value is what makes Apple or Nike sell more expensively than their competitors and increase their profit margins. In other words, in these cases, the main component of pricing is brand value, that is, the public’s perception of your company.
That’s why they invest millions in marketing.
Returning to the “real world” of companies our size… Brand value is when a confectioner is able to include in the price not only the value of the andorra business directory ingredients used, but when it starts to increase its profit margin due to the perceived value it has in the market, regardless of whether it has made any improvements to its product. In other words, the customer also starts to pay for the brand and not just for the product itself.
And how to work on the perception of value of your brand?
Basically, using marketing tools, especially branding . Branding is much more than creating a logo, much more! Branding is, precisely, working on “how” people recognize and perceive your brand. In addition to brand design, branding can use the entire marketing mix and various strategies to work on the perception of value in the eyes of the public. One of the strategies, for example, is to generate credibility/authority through specialized content, webinars, rich materials, etc. To do branding well, you need to study the public, the market, perceptions and create genuine stories for your brand based on concepts that interest the consumer.
Everything is communication, from an ad on Google to a message sent on WhatsApp.
My suggestion is that you start by analyzing all of your company’s points of contact with the public. Then, try to understand what image your brand is conveying through communication on each of these channels.
To recap: So far I have said that to increase the price we can follow the strategy of creating value for our brand and that this can be done with marketing. However, to keep the article from getting even longer I will stop here and, soon, I will do a part 2, to address strategies that can be used to generate more perceived value for your business in front of your audience.