How much should I charge for my services?

dayDreamer

Hello,
I`m a new business owner, and I thought that having cheap prices would be a good way to attract customers, but now I`m thinking that it may make people think that my work is inferior if it`s too cheap.  After all, you get what you pay for.  Check out my website at www.wordsmithsandmore.com</A> and please, please, please give me some suggestions!
Thanks, DayDreamer

Shutter

Hi, I think it would be a mistake to try and compete by using the lowest prices.  There is always another option or provider that is cheaper, if I painted houses for instance the homeowner could certainly do it cheaper himself.  It seems like your industry would be similar. If I wanted a resume for example it would always be cheaper to do it myself than to hire your firm. Instead of focusing on price, I think that you will have more success by focusing your marketing on your expertise and experience. Also market to relationships. In a service business, for the most part, people are not buying your service, they are actually buying you (your reputation, experience, results).  Pricing at the market low would be selling yourself short!

nevadascul

There are numerous sites that provide formulas for calculating rates for writers and other similar services.  You can go into any of the writers guild sites or type "writers service rates" into your search engine.  I used these formulas to set my rates.  It also depends on what level of yearly income you are trying to maintain.  The formula rates are adjustable base on your income needs.

angola

Check out my website at www.wordsmithsandmore.com and please, please, please give me some suggestions!I suggest dumping the logo intro page and just having it go directly to your "real" home page. Logo entrance pages - people don`t really use those anymore b/c customers don`t like them.

LiveWise

I didn`t like the logo entrance.  Sometimes, I won`t enter the site.  Just go straight to your home page. 
 
I help my friend with her business on a part-time basis.  She invented and sells the Dental R.A.T to dentists.  At one trade show, a dentist told her that it costs too much. (This is a foot control for a hygienist to use to input data into the computer with her foot so that she doesn`t need an assistant.  Cost of the R.A.T is $1395. Cost of an assitant is $30,000+ per year.  Now what is too expensive?)  Anyways, that same dentist brags that he charges 2-3 times more than everybody else.  He says that people are lining up to see him.  He stated that people will complain that it`s too expensive no matter how much he charges so he just charges a lot of money.  But, these people are pampered and leave with a great experience and with a bag full of "freebies".  These people will talk about the experience and pampering and gifts with their friends.  He knows they complain about the price, but he tells them to go elsewhere because he is not changing his prices.  Long story short, he works fewer hours and makes more money.
 
Anyways, charge whatever you want.  People will pay to be treated the way that they want to be treated.  If you treat them like gold, they will talk.  hey may not like your price, but they like the way they are treated. 

entreplanet

I agree with Shutter. Cheap prices not only cheapen the image of your company, but it also has the opposite effect and attracts cheap customers. You don`t want to deal with stingy customers.
Keep your prices fair and reasonable. If anything, you can avoid stingy customers that may lead to headaches and lost income for you in the future. Think long term with your business and your pricing. You only have one shot to introduce yourself as a cheap place, fair place or expensive place.

RicWillmot

There is an enormous amount of myth and mistaken thinking in the professional services arena around pricing.
 
Myth: It`s a price sensitive market
Reality: It`s a value sensitive market
 
Myth: Start cheap to enter the market and capture your share
Reality: You have now set the benchmark and customers will always want you that cheap
 
Myth: The competition will charge less than me and I will lose the business
Reality: Someone will always be able to charge less than you; and then you have no business
 
Stand out from the crowd, forget about what everyone else is charging and deliver a service to your customers based upon reaching their objectives successfully and attributing both the tangible and intangible values you have brought to the client.
 
Focus on making the client significantly better because they have you. Bentley, Cartier and other quality brands do not lower prices when times are hard or the economy hiccups. They continue to position themselves in the market to those who appreciate good value. Position yourself and market to quality prospects who will treat you like a peer and respect you for the good work you bring to the table. Then charge appropriately so that you get paid well and the client receives great value.
 
Best wishes,
Ric

TechvisitorDD

I REALLY needed to find these postings. I`ve sold myself short for too long in the on-site computer service field. I started at $60/hr, but then took a look at the calculators around the web to determine a rate. I averaged out to $80/hr after calculating  expenses, required income, and little or no profit. The best thing is that when volume starts playing into things I can hire additional techs and still keep a decent cash flow. I`ve changed my prices and lost some customers "thankfully" Most of the customers I lost were not my best. In fact they always wanted me to give them discounts and barter services. I discovered the hard way that pricing low esp in service type businesses, brings on cheap clientelle. I`m now more interested in creating relationship based customers and not just volume.
 
OMG.. i just found a marketing avenue. - Techvisitor.com - Your Personal Tech Support Team
TechvisitorDD1/28/2008 6:09 PM

RosannaTussey

Ric is right. (In fact, I know about 10 other entrepreneurs whom I need to forward his post to.)
It is so important to find those value-focused customers because they are the ones who will end up helping you to grow your business.  You will probably never receive a referral, no matter how far you bend over backwards for them, from a client who cares disproportionately about price over all other matters (especially quality) and wants to chew you down to a ridiculously cheap rate- which is a good reason in itself not to offer a ridculously cheap rate on your own.
 
However, you will find that the value-focused clients that you do a good job for at a customary rate will be the first to spread the news to their associates about what a great service you provide.  Since like-minds often stick together, chances are the people who get referred to you will also be value-focused and will be looking for someone who can do a great job above all else.
 
When you encounter prospects who are stuck on price alone, let that be a red flag to you.  I can almost guarantee you that you will experience more problems with them, in various ways, than you ever would have dreamed.
 
Offer your services at a fair price. Fair is equitable to both sides, not just one.
RosannaTussey2/5/2008 2:08 PM

careergirl

Your site, as of this posting, looks good. I agree with all the post replies in that charging a fair price for your services is essential for your business as well as for the client`s positive mental image of your business. If I go to a "discount store" I expect discount prices, merchandise, and service. If I go to an "upscale boutique" I expect to pay premium prices and get superior merchandise and service. Who are your potential clients?  What are their expectations? Set pricing to reflect your expertise and know that you are worth it.
You can always give a discount to good clients later if you want.
Suzie Williamson

RosannaTussey

Set pricing to reflect your expertise and know that you are worth it.

 
A great piece of advice!