In my last post, I covered feeling like you may not have enough education to be a business owner. If you missed that one or two, you might want to hop back over and check them out… Take Me to PART 1 / Take Me to PART 2
Today in Part 3, I wanted to address one of the most frequently asked questions I see… "How do I know what to charge for my products or services?"
Knowing what value to place on your products can be excruciating for someone who’d still determining their place as an entrepreneur. You might feel if you set your pricing too high, you’ll be driving away potential customers. But if you set your prices too low, you’re destroying any real profit you might make.
Here’s what you ultimately need to get your head around… Your product value is not determined by the item you sell. That’s right… I’ll say that again… Your product value is NOT determined by the item that you’re selling.
So you’re probably saying… wait…… WHAT??
This is what's known as the Perceived Product Value or the PPV. Much of the value placed on a product or service is perceived in how it's presented for sale.
A physical product might have a suggested retail price by the manufacturer. But most wholesalers don’t require you to sell at that price. YOU end up determining the price you charge your customers.
Charging your own prices as a reseller can be a slippery slope though… too high and you can’t compete with other vendors selling the same types of things. Too low and you don’t leave yourself enough meat on the bone to make a living. Sticking with the suggested retail price is always and option, but it’s nice to be able to have the freedom to choose.
A digital product or service is a totally different ball game, and can be a little more fluid. This also may make it more difficult to determine how much to charge.
The price of your service will be determined in large part to the PPV. How your service is perceived is how you price it. If you present your offer as a lower end service, not placing much value on it, your audience will perceive it as such and come to expect a lower price tag. HOWEVER, if you present your offer in such a way that it's deemed highly valuable, your client will likely EXPECT a higher price tag and will be less likely to balk at the price when they hear it!
So the price you place on your service is all determined by how YOU view the value of what you do.
Of course, you might be able to comparison shop a bit for similar products/services to yours to get a baseline. But what you’re offering is based on something that you either do, teach or create. And there’s no price list anywhere that can determine what dollar amount you put on you.
You’re value is determined by how you want to be perceived in the marketplace. Since there’s no one in the world who can do what you do, EXACTLY the way you do it, the value you place on yourself will vary, depending on your mindset and your own perceived value, and will be reflected in how you present it.
The value of your product is ultimately determined by you, so if you feel that what you’re offering isn’t valuable — what type of client do you think you’re going to attract? You’ll likely attract the tire kickers, the skeptics, the test drivers and ultimately THE RETURNERS. Which none of us wants to be dealing with on the regular.
Now the same holds true if you place a higher value on your product. If you value yourself and what you’re offering, others will see that value too. But YOU have to see that value first and BELIEVE IT! Because it’s gonna show… it will be evident if you don’t believe in what you’re peddlin’!
You’re essentially determining the value of the client that your attracting.
If you’re putting a bargain basement price tag on your products and services, you're going to attract the bargain basement shoppers! These are the folks that kick the tires, take it for a test drive, use up all the gas, leave a big ‘ol dent in the door and then come back looking for a refund.
But when you place a higher value on what you’re offering, you’ll be attracting a higher caliber of client. Look at it as though you’re weeding the garden.
If some people come to check out your wares, but balk at the price tag, they really weren’t that serious about working with you in the first place and are probably not your flavor anyway.
Anyone who sees the same value in your products & services that you’ve placed on them, is a valuable customer and someone who will likely get the most benefit out of your exchange.
By under-valuing your product or service, you’re stating to the world that you don’t value yourself and don’t have confidence in what you’re selling. So why would they perceive any higher value than you do?
Don’t be afraid to believe in the value of what you bring to the equation.
Believing in yourself is half the battle.
If you have any special topics you’d like me to go over, I’d love to hear from you! Feel free to drop a comment below.
Still feel stuck determining how to price your stuff? Tell me what you offer in the comments so I can help!
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