What are you worth? Pricing principles 1, 2 & 3
What are you worth?
Pricing – something most agency owners lose sleep over.
- Are we too high? Too low?
- Should we have one price for all or offer some flexibility?
- Do we simply aim for the middle of the market?
Over the next few sections I’m going to present you with a few pricing principles that should answer most your questions – and have you dozing the night away once more.
Pricing principle #1: Setting your price
‘Setting your price is like setting a screw: a little resistance is a good thing.’
If all your clients see your prices as irresistible, then you have cause for concern. Being irresistible to all clients is not a great thing. In fact, it suggests that your prices are way too low – if no one is batting an eyelid at your quotes then it’s time you looked again at your charges.
A good target to aim for is 15-20% resistance from clients.
10% of people will complain about just about any price - some to hook a deal, others to hit their budget and others because they are sure every agency out there is trying to milk them.
It’s in the remaining resisters that you can judge your pricing.
Keep these to 10-15% and you’re pricing is spot on.
If it drifts higher than this, consider scaling back your charges a little.
Pricing principle #2: Are you sure you need a specialist?
‘A business is simply an idea to make other people’s lives better.’
Sir Richard Branson
Your freelancers are a large part of your pricing equation. Some with very specialist skills will command higher rates than most of the less specialist ones on your books.
Be honest with your client if you think their request for a specialist is unnecessary. Suggest instead a freelancer with an excellent portfolio of similar work but much lower charges.
For the inch or so of margin you lose you will regain a hundred times over in winning your client's loyalty and respect.
Pricing principle #3: Flexible freelancers
I’m usually prepared to flex on my price for a client if I can see potential for a lucrative long-term relationship. And sometimes this means that I ask my freelancers to reduce their costs too.
It’s only fair though that the next handsomely paid job that lands on my desk is offered first to my flexible friend.
There are plenty more pricing principles heading your way – maybe try a milky drink before bed tonight if all your problems aren’t already solved.