How to Price Your Services Correctly
Pricing depends largely on many factors time investments, depth of research, the expertise required, and many more.
It is one of the most tricky questions out there when it comes to building an agency or any business for that matter.
I mean ask for too much and you might lose out on the job or ask for too low, the client may wonder that your bargain price is due to a lack of experience or quality.
So, what should you do? If you’re having a hard time pricing your services correctly, here are a few things to consider that can help you.
But first, let’s cover different types of pricing models,
Types of Pricing Models
Flat-rate is considered as one of the simplest models of pricing your services. This model offers a fixed single price per month or year that includes access to all the functionalities.
For example, if you are asked to deliver 4 blog posts of roughly 500-700 words, 3 social media posts, and manage content marketing for a month for a client. You calculate that it’ll take 15-20 hours of your time.
Normally, you charge $80 per hour, but since the client is from the legal industry you may require some additional level of research because of the niche. So by considering all such factors you decide to charge somewhere between $1600- $1800.
The biggest advantage of the flat-rate pricing model is its easiness. It is simple to communicate and thus easy to sell. But on the other hand, the down-side of this model is you may have to work a bit extra than you have estimated. What if the client requests multiple edits or revisions?
So for such clients, you may have to consider different pricing models.
In order to avoid the work going beyond the estimated hours specified in the above example, you can opt-out to use the hourly pricing model.
Hourly pricing is pretty simple for everyone to understand. You can sell prepaid blocks of time like 5 hours at $X per hour or you can simply finish the work and then send the invoices. With the hourly pricing model, you don’t have to worry about estimating the time you’ll spend in advance. You can just finish the work and get paid for it. Easy breezy!!!
Value pricing is a model many agencies use to price their services at a rate they believe their clients are willing to pay. Value pricing is particularly gaining popularity in the industry of digital marketing. Even though the model is a bit complex but if executed properly, it can give major incentives to both the company and the client.
The obvious downside with this method is if your work fails to pay off it may leave you and your clients disappointed. But if you have an established record of delivering great results then it can be the most profitable path for you as well as your customers.
Major Factors to Consider Before Pricing Your Services in Sales Proposal
Do a little snooping on your competitors
Whether you’re a freelancer or a full-service agency you’ll always want to take a look what your competitors before pricing your services. It’s probably unwise to set your charges too high or too low without a good reason.
- How much are they charging for different services?
- For those rates, what features and level of service are they offering?
- What customers are they attracting with their pricing?
- How are they positioned in the marketplace?
Answers to these questions will give you a baseline for your pricing strategy.
Take the efforts into account
First figure how much time you’ll need to finish the job before you quote your flat rate or hourly rate in the proposal to the prospective client. What about
- Weekly client calls
- Reach time if you’re expected to attend in-person meetings
- The time required for consultation
- The time required for the additional level of research or analysis
If you forget such details into your rates while quoting, you could end up feeling the project wasn’t worth the time and effort.
There is always going to be someone out there in your industry who works for less than you, but you can’t let that disqualify you. Other than experience and skill level, a work portfolio and a strong sales pitch play a huge role when it comes to charging your services in the sales proposal.
If you want to earn well by doing what you love, charge as per your worth.
- Drop-in some names of the biggies you’ve worked with from your industry in the past in your sales pitch,
- Include the links of your most stellar work in the portfolio.
- Gather social proof like testimonials and reviews and show them that others have trusted you and they have been able to produce some positive results.
In the end, perception is all that matters and you’ve to tell your clients that you’re worth every penny.
Tips for Creating Pricing Section in Your Proposal
Hook Them Up With a Captivating Title
A good title makes all the difference in the world. The main purpose of the title is to draw attention and encourage people to start reading the rest of the section. This is why the words that you use and craft your title is vital. So if at all possible, avoid using “pricing” in the title.
Instead, focus on expressions such as investment or ROI. Here are a few psychological tricks to help you move your prospect one step closer to signing a deal,
- Include keywords in the tile
- Be short and to the point
- Describe the desired benefits
- Target their pain points in the title
Provide a Responsive Pricing Table
How do you effectively price your services and increase sales and make more money with little or no effort?
It’s simple; include a responsive or interactive pricing table in your sales proposal. Incorporate interactive price tables with a variety of pricing options where customers can modify the quantity, select products or services that suit their needs.
An interactive pricing table allows clients to create a customized version of your digital marketing services for them. It also allows clients to select additional services and at the end can check the updated pricing in real-time.
Design a Pricing Table that Converts
Once your potential client reaches the bottom of your sales proposal, they aim to make an important decision. And your pricing table might just be the answer to everything they have been waiting for.
A poorly designed pricing table creates confusion and uncertainty and ultimately sends your prospects to your competitors. That’s why always make sure to optimize your pricing table as per their needs and make it simple, easy to understand, useful, attractive, and highly converting.
Here are few things to remember when creating a pricing table for your services,
- Use a straightforward language: If you want people to invest their hard-earned money in your services then you need to be as straightforward as you can so that they don’t get confused about what they’re investing in it.
- Use columns for each tier: Column helps them to just quickly scan.
- Offer a suggestion: Highlight the popular choices of services at the top.
Don’t be afraid to charge what you feel is appropriate or even increase your prices to a rate that makes more sense for your quality of work.
It is you who know how much research, skill, and strategy goes into your work, now you just have to charge for it.
All the best!!!!!