Our clients want the best value for their money. Don’t you?!
Whenever we are making a decision to purchase a product or service, we’ll most likely take a look around and compare what we are receiving (quality, benefits and results) to what is being offered for that price point. We then make our decision to buy based on what we perceive to be the best price for the best value being offered from that comparison.
It should come as no surprise that many business owners have an ongoing struggle with attaching a fair and accurate price to the products and services they offer.
When setting prices for your products and services, remember this golden rule:
perception is everything!
Do you know how your customers view your product or service and what they are willing to pay for it is based upon those perceptions?
Pricing is all about knowing your customers — what they want, what motivates their purchases, and how they feel about the products, services and features they are purchasing.
To help you determine how your products and services are being perceived by your current client base ask them the questions below. The answers you receive may surprise you and have you reevaluating your current pricing strategy.
1. How do your customers perceive your product and/or service in terms of value?
2. Do they feel the value being delivered is in alignment with the price they are paying?
3. What benefits do your customers get from your product or service?
4. Are your prices consistent with those benefits?
5. What is the current supply-and-demand of your product or service?
6. Does your product have a recognizable name that allows you the luxury of overpricing?
7. How does your price compare with your competitors’ pricing?
Your products and services will be perceived as high-, moderate-, or low-priced, usually compared to your competition or to your customer’s own notion about what “something like that should cost.”
There is no danger in having the price of your products perceived in any of these ways. It all depends on how you are perceived by your target market.
You want your pricing strategy to be in alignment with the perception of your target market. For example, being known as “moderate-priced medical-care insurance provider” might make some customers nervous and think they are getting cut-rate medical service. The point is to match the perception of your price to the perceptions of your customers.
Great marketing theory Linda but unfortunately much of marketing theory has been written about the retail space and not the environment bookkeepers find themselves in. While I agree with the sentiments of your article I can’t help think that the perception of the small business client is that bookkeeping is a low priority and high cost area of their business and that a majority feel they can better Mind Their Own Business. Unless we educate small business about the benefit of using bookkeeping professionals they will continue to shop on price and not consider the value of bookkeeping services. Quite often the values espoused by the bookkeeper are at odds with the business owner who is looking to “get away with” claiming private expenses or not declaring cash received from a business transaction. I sat in a meeting yesterday with the Australian deputy commissioner of Taxation where we were told that bookkeepers who want to be BAS Agents will have to show they are “fit and proper people” by lodging their own tax returns on time and applying tax standards to their clients. This then applies extra pressure on bookkeepers to meet standards and constraints not strictly applied to small business clients who don’t lose their ability to trade if they don’t conform to tax rulings. Until small business owners come to realise the cost of not having an efficient bookkeeping system far outweighs using the services of a professional bookkeeper we will continue to find it hard to market bookkeeping services to business.