Small Business Talk
The Podcast to Grow your Business Faster
Price Is Just a Number
Show Notes
I can’t imagine we’re getting close to the 200 and I have been recording almost 200 fantastic episodes for you, so I cannot wait to share it with you. So, for you guys that have stuck with me through the whole 200 episodes, I really appreciate you, especially when we had a couple of bumps in the middle, but that’s all part of it. Thank you so much guys.
If you’re new to Small Business Talk, I bet you go back and binge a few, check out a few episodes and see what you think. And you won’t have to worry about the bumps because they’re all ready for you. So whichever way you like to listen, I really do appreciate you. So today, great subject, very juicy price.
What are Prices?
Price. How do you pick it? How do they charge it? What is you worth? What are yout thoughts with prices and its value? It’s just a number. It’s about what you’re charging, the amount people are willing pay. It’s just a number that is set up. Some people get really caught up on price. What does it mean? Some people won’t buy things because they think it’s too cheap. Other people won’t buy things because they think it’s too expensive.
The Value of Pricing
I think I’ve used this example on the podcast before. Years ago I was down in Tasmania, right down the bottom of Australia. We were doing great. We’re walking past this block of land and people stopped and gasp. One said, “How expensive it was! The other say, how cheap it was.
See, it just depends on your perception and what other things you’ve got to put it against. So you might think that your personal services are expensive. Other people might think they’re cheap or vice versa. So it’s about that perception. It’s about what value people are thinking that they are getting from your price. So how do you set your prices?
Setting Your Price
How do you work out what that number will be? Well, a really good way to do it is to work out what you want to earn for the year. So you pick a number and then you divide it up. So let’s just say 100,000, because that works really well for the maths. So if you want to earn 100,000 for the year and you had one client, then you would have to jack them 100,000 if you had to, cause then it would be 50,000.
Another example. If you had four clients, it would be 25,000. If you had ten clients, it would be $10,000 each. And if you had 20 clients, it would be $5,000. So, if you have a product that’s relatively cheap, then you’re going to need a lot more people for 100,000. If it was a dollar per product, you would need 100,000.
Did you get the idea? So when you’re thinking about what your price will be, you need to think about how many people you need, how many items you need to sell, whatever it is that you’re selling. And packages work really well in the service industry. So instead of thinking about an hourly rate, what is your package?
Do you have a three month package? Do you have a six month package? Do you have packages that allow people to upgrade so they might start on a lower one? They might look at a high one. Do you have a one on one package as opposed to your group package?
And if they think your one on one is expensive, you can offer them the group package. They might say, “I don’t want to be in a group with ten people”. So then they might come back to the one on one because then it doesn’t look as expensive because you’re getting that one on one personal service and it’s more tailored to what they need.
You see people, they’re selling exactly the same things. Multilevel marketing is a perfect example, and some people do it really, really well. Other people don’t. Generally, it boils down to confidence. Are you confident in your product or service? Are you confident it can help somebody, the person in front of you? And if you’re not, then you shouldn’t be selling it to that person.
Be Confident With What You Are Offering
If you are not sure with your product, then maybe you shouldn’t be selling it at all. The price is definitely about how you feel when you’re giving that service to the person. If you’re really confident and happy with that service, then you’re going to show so much more value. So make sure that you are thinking about sales and service and that the price will reflect that.
So when you’re thinking about pricing your services, make sure that you are in the right place, that you were solid in your life, that you can help that person and you can give them the best value and you are the one that can help them.
Price Is Just a Number
If you’re really comfortable with your price and you’re helping to serve, you’re showing them what it is and then you’re just going with it. It’s much more comfortable sales process for the person that’s looking at it. So a price is a perception. It’s about what you’re offering, who you’re offering it to and how you’re offering that.
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