Module 3: Choosing Your Price Point for Optimal Results
When you first select how much you will charge for the services you provide, it is important to think about what VALUE you can give to your clients. Everyone wants to make $X,XXX per month but that doesn’t mean you can just create a simple website and charge whatever you want for it. Instead, design your services to be able to make significant improvements for your client’s business and show that those services are worth charging higher prices.
Let’s say you have a system that will increase the bottom line of company by $5,000 per month. Business owners will gladly pay $2,000+ per month if they can add several thousand dollars in profit without any extra work. By being able to quantify your results, you’ll be able to charge higher prices and justify the cost… making it easier to prove your worth to businesses.
Don’t just pick an arbitrary price to charge without knowing your actual benefit. No one will pay $5,000 to earn $5,000. Never make a claim that you can’t keep, either, since it will always hurt you in the long run. If you can’t increase profit by $5,000, don’t promise that to a client. Be realistic and work within your means… it is always better to over-deliver than to over-promise.
Picking your price point can often make or break your business since that is one variable that most people will judge you one. If you offer your high-end consulting services for $99 and promise thousands of dollars in return, they won’t take you as seriously because it seems too cheap. However, if you charge several thousand dollars or higher for the same service (provided they are high quality), there is a perception that you are an expert and would deliver better results. You should always test different price points, but starting higher and giving discounts, when necessary, is usually a better plan.
Another factor to consider when selling high value services is your client’s sense of security with paying a relative stranger a large amount of money. People have a much harder time handing over a large check if they aren’t 100% sure it is a smart investment. You can help ease this by offering some sort of guarantee or refund for the services offered.
Of course, this does not mean that the guarantee would allow someone to take advantage of your services and then give a sob story to get them for free. Develop strict guidelines for your guarantee and make them public so that everyone is on the same page.
A poor money-back guarantee would be:
“If you aren’t satisfied for any reason, I will refund your money.”
This can work in some situations, but it gives the customer too much room to wiggle out of the deal. Instead, try to narrow down the scope with something like:
“If you don’t get at least 1 extra lead per month, I will refund your deposit.”
Another way of making your client feel better is to charge 50% up front and 50% on completion. Or, if you are confident in your services, charge $0 upfront and then your monthly fee AFTER they start seeing results. This is an excellent way of attracting new clients and getting your foot in the door since it is a no-risk offer.
As you can see, there are many ways to structure the deal and they all have their benefits and draw backs. Like anything else, start with one payment structure and see how your leads react to it. If they scoff at the price, try lowering it or changing the terms. Always try to look at it from their point of view to see if the money you are charging is worth what you are offering.
Now that you have a better idea of what price point you will charge and what niche you will be serving, we can begin building an automated system to run the majority of your consulting business.