Tweet

What do your prices say about your business?

Written by: Jane Francis

Article Overview: Do your prices make your customers feel safe or afraid? Take the time to understand your customer’s emotions and you will find it easier to price yourself right.

What do your prices say about your business?

To understand what your customer thinks of you, you need to think like they do.

If you’ve read a book, or have completed a course, in sales or marketing you will have learnt that ‘People buy on emotion’ so how about this: If people buy on emotion AND people pay with money THEN what emotion does their money buy them?

When your customer buys from you what emotions are you satisfying?

For example, my young children regularly spend their loose change at ‘The $2 Shop’. Of course the stuff is junk, and it breaks in no time at all, but when we shop there I feel safe because I know that nothing will cost more than two bucks. As for my kids they have the [short lived] fun of spending their disposable income. I feel SAFE and they have FUN!

‘The $2 Shop’ and others in that category market themselves entirely on price. Their price IS their marketing and, as a strategy, it works for them.

If you are contractor or freelancer think about your price and ask yourself: What emotion does it satisfy in your customers?

Greed? Disdain? Pity? Love? Lust? Pride? Fun? Security? Concern? Worry? Fear?

Does your customer purchase your product or service because they ‘must have’ what you offer? If so, why is that? Must they have what you offer because they are trying to outdo others (greed) or will owning what you provide make them proud of themselves, or will it satisfy their lust in some way? Does the price you charge have a bearing on your customer’s impression of you? Will your price excite, entice, satisfy or disappoint?

Will your price make your customer feel safe or afraid? For example, the dentist who charges half the ‘going rate’ will always make me feel afraid.

Take the time to understand your customer’s emotions and you will find it easier to price yourself right.

Related Articles
  Stress-Free Selling® - The Power of Belief
  Stress-Free Selling® - Easy Ways to Avoid Price Objections
  How to set your prices
  Discounting Prices: How Low is Too Low?
  The Right Real Estate Offer

Article Tags:



Related Forum Posts
zipcar saves Gas cost - The gas prices haven't affected me in anyway. I use the Transit system and ZipCar. I love Zipcar 'cos it has Gas and Insurance included in the prices and they haven't raised that for a couple of years now.
Online payment systems?? - Hey everyone, I was wondering does anyone here use online payment systems to do business? Could anyone give me some advice on some good companies? I will be selling large volumes at low prices and I see that many of the payment processing companies take around 20c-50c off each transaction, as ill be selling my goods a such low prices that is a huge margin! I was wondering does anybody know of a company that just charges a set monthly fee?? Thanks
Re: What is your biggest challenge? Today? - [quote="Alan Mater":3qk869js]No, but it's a good indicator that you'll get good quality. People that provide quality know that they can raise prices due to the quality of their work.[/quote:3qk869js] It is certainly an indicator, but my personal experience after working with many many freelancers, that price is can be a weak indicator. Quite often the reason is some people are much better at marketing and selling themselves, which results in more clients, and higher prices. But their ability to market and sell themselves it not necessarily an indicator of their quality. [quote:3qk869js]Should we let the market determine how much we're worth, or should we tell the market how much we're worth and let it up to them to decide if what we're saying is true?[/quote:3qk869js] The market always decides. The price is not set until a transaction takes place, so you could put your prices where-ever you want but if nobody wants to buy it, then the market has refused that price. Its certainly true some people undervalue their work (just as some over-value), but you can only raise prices as much as people are willing to pay, and as you raise your prices you'll find fewer and fewer willing to pay (market forces). If you can charge more than average in your industry then that is great, certainly you should not lower your prices and I was in no way suggesting that. Its up to the freelancer to try and get as much as they can for the work they do, but market forces will always limit that.
Re: What is your biggest challenge? Today? - [quote="christew":1f5i0uox][quote="Alan Mater":1f5i0uox]The question of quality comes into play at this point. [/quote:1f5i0uox] Yeah quality is often correlated with price, but paying more won't always guarantee higher quality. If you look around there is a huge amount of great writing talent that work at good prices. I was once one of those writers (started at $3/post) before I eventually ended up doing my own thing. The internet has empowered almost anyone to become a writer very easily, which has opened up the job market, pushing down prices considerably.[/quote:1f5i0uox] No, but it's a good indicator that you'll get good quality. People that provide quality know that they can raise prices due to the quality of their work. But, as you said, because of the competition these days, the prices are low and forcing people to charge less than they normally would. It's finding the balance between the price you want to pay and the quality you want that can be a challenge. You may have to go through several different freelancers before you find one that will be your long-term provider. I have a client I write articles for at very minimum prices. I don't mind it, though, because it's not my main service, and I know I'm helping the client out with getting more work. He has to charge lower prices because of the competition, so in turn I get paid less. This brings up the question: Should freelancers lower their prices just to please the market and risk losing money in the long-run? A problem I see is that people under-value their work too much and to the point where it's really not worth doing anymore. I would much rather keep my prices a bit higher and continue to provide outstanding service, rather than depreciate and devalue myself. Should we let the market determine how much we're worth, or should we tell the market how much we're worth and let it up to them to decide if what we're saying is true?
Adjust Your Prices Canada! - I get annoyed when I go to the store expecting to get a deal only to notice that the store has not adjusted their prices. However, I do not think that lowering their prices is the only option, perhaps if stores provide the customers with extra "bang for their buck" or a unique experience when they visit their stored Canadians won't flock to the United States for better deals.


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Tweet

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

Ways to Improve Your Landing Page Conversions

How To Calculate A Minimum Fee For Your Services

3 Health Insurance Misconceptions

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.