The Business Bulletin
The power of package pricing Someone shows an interest in your services and asks you for a price. Fantastic! They tell you what they want and off you go to work on a proposal. Stop! Before you go any further, there are several things to bear in mind if you’re to get as close to the right price as possible and make a sale.
The problems with pricing With no universal price list to guide you, it’s incredibly difficult to work out how much to charge. You could have a look at your competitors’ prices but, as they’re in the same boat, their price may be far from “right”. Offering one single price point is therefore a risk.
This is because: ■ you have no idea what the customer’s budget is or how much they’re willing to spend ■ you and your customer are looking at the price from two very different standpoints – you based on the amount of work involved and the customer on the end result ■ services are intangible so you’re relying on the customer’s perception of what you’re worth. Very difficult to
Margot Clarke Clarke Consultancy Margot provides business support to a variety of companies across a wide range of industry sectors. With an international background, she is highly experienced in helping business owners understand what’s really going on in their business. If you’re struggling to understand your numbers, Margot’s thorough approach to accounting allows you to control your cash flow and manage your figures, so you can meet your business objectives. 07711 011368 margot@margotclarke.co.uk margotclarke.co.uk
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assess perception when you can’t see it through their eyes ■ no two customers place the same value on the same service so a price that’s right for one customer isn’t necessarily right for another ■ no two customers require the same level of effort, and you won’t know what that level is until you start working with them
really want. Or you could end up spending more time than you can afford and having to turn away a better paying customer. Offering only one price point is a gamble and you can guarantee it will always be the wrong price. When someone asks for a price, they’ll have a number they’re prepared and willing to pay. The probability of it being the same as your price is pretty much zero. If it’s lower it means your price could be too high, and they won’t buy so you’ll lose out. If it’s higher then they may well buy from you, but you’ll have left money on the table and lost out on better profits and better cashflow.
The principles of packaging Packages are there to offer multiple price points. They’re ideal for both products and services but work particularly well for the service sector. The aim is to bundle several services into a single combined unit. Where
■ keeping the price low to clinch
the customer has the option of buying
the deal could mean having
each service individually it’s important
to cut corners and not give
to ensure that the combined price of
the client the results they
the package is less than the total of
