I recently read the e-book Breaking the Time Barrier by Mike McDerment, the co-founder and CEO of Freshbooks expecting to further my time management skill set. Instead I stumbled into being wowed by what Mike wrote. It was his story not the topic that inspired me to write this post.
What this e-book did was put in perspective a value based pricing model. Maybe that’s why some of my pricing is per hour per task and some is a flat monthly fee based on value. It didn’t focus on time management, but on billing for the value received for the price.
Time management as I mentioned wasn’t my problem. A concern over price was.
Pricing is a common business concern. Are you charging too much or not enough? Are there too many options? I’ve struggled with it myself which is what inspired this honest blog post.
How valuable is your business presence, or impression, or customer memory? If the answer isn’t known, maybe you need to hold off on starting your business to figure it out.
As a volunteer educator at a prestigious community college, I strongly advocate that social media be one important component to their business plan. Social media opportunity offers business an avenue to engage their customer audience using social media. Pricing based on any viable business requires a value based approach.
Why value you ask? Because of you don’t assign a value to how much money you need to take in to pay the utility bill then your business may not make enough money to continue operating.
I recently looked at my pricing very closely. When I first set it up I looked at my competitors but didn’t mirror their pricing. Instead I figured out how valuable my services were and asked more than a few different companies verbally how much they thought it was worth. Using those numbers and factoring in time, my pricing emerged. Many competitors continue to show a bronze, silver or gold pricing tier, or they show none at all. A gasp is my response. How would any customer know how much to budget when they hire these competing businesses?
Many business services are unique. Past customers have hired me to do everything top to bottom. Others want very specific tasks taken care of or for service as an advisor at an hourly rate. That metallic pricing tier did not fit my customers needs. However, my current pricing model does.
Customer satisfaction is what matters most. For me it is intrinsic in my social media value.