Entrepreneurial Pricing: Advice That Works

entrepreneurial pricing

When you’re first starting out online, it can be tough deciding on an entrepreneurial pricing strategy for your products and services.

So today we’re talking about how to choose what price you should be charging, and whether you should be displaying your prices on your website or not.

Entrepreneurial Pricing Advice

What To Consider As You Price Your Offerings

When it comes to choosing a price, there are a number of things to consider. The first one is the value of the product or service you’re providing.

When it comes to determining the value of what you offer, there’s no better way than to put yourself into the shoes of your ideal customer. Will it be worth it to them to have this problem solved?

To have this part of their life enhanced? It doesn’t matter what products you sell, whether it’s a service where you do something for them, and answer questions or give advice, or you sell jewelry or decorative notebooks.

There is a value that you are providing in their lives, you just need to get a feel for how much they value this addition to their life.

After you determine the value you need to determine what the market will bear. Usually this is done by looking at your competitors pricing. But it really sucks when you look at your competitors pricing because you’re just setting the bar where ever your competitors are.

And sometimes you’re going to be seen and compared to competitors, and you don’t want to be just like one of them. You are different. You are reading and watching this video and do things that other providers or product sellers think you and your industry don’t know.

That’s why you need to be aware of the pricing of your market, but not be dictated by it.

There’s always a place for you to define your own category for yourself.

Your Business Model: One To One or One To Many?

If your market is fairly small or you don’t have access to a lot of the people in your market at this point, it makes more sense to have higher prices and to sell fewer of what it is that you offer.

As you start to scale and to be able to reach more people, your prices can then go down to reflect this reality. This might seem kind of counterintuitive, but actually makes total sense when you think about it from a business perspective instead of from a “this is what we’re supposed to do” perspective

It’s possible to choose a price that feels good and that fits with the market and that people end up buying or hiring from you, but it’s not a resonance with what you feel good charging.

Maybe you’re not charging enough to feel comfortable offering these packages or products. This can happen when you know your value, but you just haven’t been tested or proven in the marketplace yet.

In this case, it makes sense to work for free or to give away some temp polls and get feedback so that you actually are sure about your confidence before you start offering your packages at this price point.

Another option, is to offer your products or services at a lower price point and receive enough positive feedback that you can then raise your prices over time. This is a great way to go no matter what business you’re in, because it will help you build up your confidence as you go forward and prove to yourself and your future customers that you’ve got the chops.

Pricing is something you grow into. You can’t start out charging something you don’t feel comfortable charging. But you also can’t charge such a low price that you don’t feel good offering your services or products at that price because it makes you feel resentful.

Should You Put Your Prices On Your Website?

So now we’re back to the age old question: should you put your prices on your website?

If you’re selling something that people can buy off the virtual shelf, then yes. People need to know what it cost to buy it. If instead you offer a premium service and the price will vary depending on the scope of the work, setting a price range is a great way to go.

Having some prices online helps you to filter out the people who aren’t able or willing to invest with you yet. If you’re just getting started and you don’t want to filter anyone out because you just need to get clients in the door, then asking people to get in touch with you for pricing information makes sense.

One drawback to not having prices on your site is that people will likely assume that it’s more expensive than it really is, so you need to be able to have a great sales conversation to deliver your pricing.

So the bottom line is: yes you want to put prices on your website most of the time unless it’s a variable pricing model or you plan to increase prices fairly quickly… And you’ll want to ease into your pricing structure and let it evolve as you evolve and are able to reach more people, too.

Entrepreneurial Pricing Ahoy! Got Questions?

Let me know your pricing questions in the comments below!

 

21 Responses to Entrepreneurial Pricing: Advice That Works

  1. I think for sure put prices on the website… we can talk about value all day but for some people, price is the make or break factor. I hate having to scroll down for ten miles only to have to ‘add item to cart’, and only then see I truly can’t afford it, ugh! It feels like a game, a gimmick. Or making me opt-in before seeing the details of a product. Maybe it works, I don’t know, but it’s aggressive and a turn-off.

  2. What a great video, Nathalie! I would agree that you should put prices on your website. It creates an atmosphere of transparency that’s crucial especially for intimate service-based businesses like coaching. What is your opinion on pricing tiers? Yay or nay? How many, and do you think the strategy should be different for expensive vs. inexpensive products or services?

    • Hey Laura! I think pricing tiers are super important! It’s generally good to have a few different price points in your “funnel” and having a higher priced offering can also help you sell more of your lower priced offerings, too!

      • I’ve had the opposite experience with pricing tiers. When I’ve done them, I drove more sales, but at the bottom pricing tier. It also caused more headache on my end to have multiple levels of service. For my last launch, we went with a single tier, and it was my highest price point. I got much more revenue from that launch than any of the others, even ones where I sold more than 2-2.5 times more seats (I run an online course). I think it’s more important to have a range of products at various price points, rather than pricing tiers on any one particular item. I started out with a premium product (and have been selling it well), and I’m now going back and offering lower priced products so that people can get a taste of the value I offer before signing on for my signature program.

        • Thanks for sharing your experience Jen! I think it really depends on the positioning, and if you have 3 pricing tiers you’ll tend to sell more of the middle one. But I can see how having two would lowball your numbers, so I really appreciate you sharing that with everyone so they can learn from your experience!

  3. I totally agree with you – if I don’t see a price, I don’t sign up, or apply or anything. It might be because, at the moment, I know that I wouldn’t be able to afford something which doesn’t have the price listed, but if I don’t see the price, I have no way of knowing if I can afford it. That said, I totally aim to be in a position in the future where I can afford stuff, so maybe my opinion will change then…!

  4. I agree that putting prices on the website helps to filter potential clients and it makes it also really clear as to how much you charge what what the value is.
    There’s no need to shy away from how much you charge!
    Stand in your self-worth and acknowledge the value you bring out into the world :)

  5. Love the concept of a “resentment number”, Nathalie. At some point in the growth of my business it became less about money and more about what I’m giving up to earn that money. If it means taking on a new client who wants something completed, like yesterday(!), then my resentment number is higher because working on weekends to get it done takes time away from spending with family and friends.

  6. I love this video Natalie. I put my prices on my website because, like the ladies said above, it shows transparency and it weeds out who cannot afford to work with me. But I always kind of question it because most Interior Designer do NOT put their pricing on their website. Luckily I’m not trying to fit into my industry…so thank you for confirming my decision! Cheers!

  7. Loved it. Thanks, Nathalie.

    I have been toying with prices for a while so this was perfect pricing.

    I just launched a new service ONLY to my subscribers, and for a lower rate, so I could test out the service, the pricing, and the value.

    In a few days I will launch the final service ‘to the world’ and it will have the new price. It’s exciting and a safer way to test a new pricing structure.

    What’s tough to me is how to convey in my description that the price includes a new connection and mentor for your biz. I find that yes, I provide a service with defined parameters, but really what clients get is someone who knows them and their business intimately and can be a quick touch point from here on out.

    I am thinking through ways to structure that, explain it, price it, and still keep things flexible. Do you keep in touch with clients after you work with them? Or after they purchase a service with you?

    • Hey Victoria! I think that’s a side benefit and result, and definitely something that’s worth a lot in terms of value. But also know that as you get more past clients, it becomes harder to maintain the same level of support/awareness for each person, so keep that in mind too! :)

  8. Hey Nathalie! Great thoughts!

    Ahhh…the psychology of pricing. I love it.

    If prices aren’t shown, I never bother to ask about products or services because I always assume they will be too expensive.

    A great strategy I’ve seen is to have a sales page where a product or service is first described so that you’re completely drawn in, thinking you can’t live without it, and then you’re led to another page where the rate is revealed.

    Something I’ve also seen that also makes me NOT want to buy is when something is described as “affordable” or “low cost”. I guess I assume the seller is desperate or that the product/service isn’t worth my money at all. There are much better ways to make people realize something is affordable and worth the price without making it sound discounted.

  9. Loved this post – I struggled with pricing when I first started my service business but I didn’t expect to when I started launching courses. Now that my first course, the Rock Star Guide to Facebook Marketing, launches tomorrow I can say for a fact I was wrong!

    I had an even harder time pricing the course because I couldn’t use excuses like “it depends on the client”.

    Thanks for your advice I will definitely be using it when I revisit my course price in a few months!

  10. Great post Nath :) Another great piece of advice you always remind me around pricing is to ‘trust yourself’ and ‘you know more than you think’. So even if you are nervous about where to set your pricing, trust that you have the answers you need!

  11. Hi Nathalie,

    Interesting and lovely video as always. I would say that I slightly disagree with you on the first point, though. If you try to put yourself in the shoes of your ideal client and ask what the service would be worth, but you don’t yet have a lot of cash yourself, it’s so easy to underprice yourself. I’ve heard the advice: If you can afford your own rates, raise them.

    On comparing yourself to competitors, what do you do when you’re in an industry largely populated by people who don’t raise rates for ten or fifteen years? This has been a thorn in my side for a while now – it’s hard to be the one person who charges a lot more than everyone else. I guess it all comes down to setting yourself apart, differentiation, USP and all that jazz :-)

    Keep it up,
    Sukie

    • Hey Sukie! If you’re underpricing yourself because you couldn’t afford the price, it’s because you’re not *really* putting yourself into your ideal clients’ shoes. You’re still in your shoes! You’re either imagining people like you who don’t have as much money yet, or people who don’t value it. Those aren’t your ideal clients! Those people are out there, and getting into their shoes is an art and a skill.

      I say be proud that you’re the one who charges more than everyone else and make sure your products/services match the value. And yes it’s definitely a differentiation!

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