By Talmar Anderson
Pricing is a challenging part of any business. Making sure you are taking advantage of market trends, value delivered and demand from clients are all items we want to consider when setting a price. And oh yeah, covering cost of goods, operations and…dare I say it? Make a profit! A common issue that my service industry clients struggle with is how to have a set price for client consideration. “It depends” is a killer. I promise that while start to expound on the different possibilities you are losing the listener. “It depends” is to open ended and scares the buyer. They worry that there will be no clear end on the investment. Hourly pricing is the easiest because it is quantifiable and therefore most service professionals comfortable justifying the price when it comes to invoicing or proposals. I would challenge this and suggest that you consider packaging to bring in more qualified prospects and improve your sales conversion ratio (how many leads turn into paying clients).
Packaging is the process of setting an inclusive price with a set expectation of delivery. If you can find a component of your business deliverables and create an easy to understand package then your clients will be able to more quickly understand your offering and self-qualify.
A package should have:
- a defined price,
- details of exactly what is included (and depending on your industry possibly what is NOT included) and
- a declaration of how exactly a client can add to the package as well as any price considerations.
As an example we can look at a website development company. As the owner, you can take a backward look and case study review of your past clients and projects. Let’s say that you have decided that your company can create a quality product, with consideration of your costs and expense, of a delivered website for $5,000. This beginning package may not be at your highest profit margin but is easily duplicated and is still a good step one for your entry level clients.
Once defined you can put that Package “out there” – on your marketing materials & website or as a rolling-off-of-the-tongue starting price point that is easily quotable in any conversation, amazing things will happen. Several great benefits will occur:
- Prospects can easily self-qualify.
- Referral sources can make sure that leads will be more consistent with your potential target market.
- Confidence and talking points come more easily to any team member that is part of a conversation representing your company.
EVERYONE can know that your projects start at $5,000.
This process can be replicated for other services or price points within your company. Consider packages based on average sales and even the high-end projects can be packaged. If the website development company can also offer a full year of brand management, website development and content generation, this package can be spelled out to ensure you are in the running for those types of jobs. Don’t worry about missing out.
The key to packaging is to not worry about what you COULD do. Could the website designer create a logo for someone? Sure….but let’s be known for websites if that is our core offering. As you get in front of qualified prospects and existing clients you can expand on their needs and educate on your company’s other skill sets. Packages will get you in the door but absolutely DO NOT have to be all that you offer. Getting rid of “it depends” for fear of missing out will strengthen your credibility and allow clients to more easily connect.