The Art of Pricing: Is Your Current Pricing Strategy Killing Your Business?

Effective pricing is an art. An art that so many entrepreneurs overlook. So eager to sign up a new client or customer, we often under-price our services and so under-sell ourselves over the longer term. This behaviour can gnaw away at your profits and therefore, ultimately, your business.

Here are some tips on effective pricing:

1. Never bill by the hour - you can't scale hourly billing and it will (almost always) sound comparatively expensive
2. Try to value bill - what is the value of the outcome that your service will deliver to your client? Set your pricing accordingly
3. Menu pricing can work great - apply the 'Rule of 3' as clients will invariably choose the middle (second) option (so make sure this middle option is profitable and covers your sweet spot!)
4. Lead with 'risk aversion' strategies - i.e. people are more likely to move towards solutions that remove (potential) pain than those that lead to a better outcome
5. Package your services well e.g. glossy brochures and smartly delivered proposals will work hand-in-hand with your premium prices (think Apple packaging = premium product)
6. Break it down into instalments to take attention away from the hard 'overall' price
7. Don't worry that you can't service everyone - you may well end up working less for more profits once you get your pricing structure right
8. Bonus: Remember to ensure that your payment terms are nailed on - direct debits and advance cash collections. Don't be left hanging waiting for the cash...

What advice do you have to help improve pricing strategies for entrepreneurs in business?

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Posted from my blog with SteemPress : https://businessn2k.com/the-art-of-pricing-is-your-current-pricing-strategy-killing-your-business/

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