Planning Weeks 9-10

Set Your Prices/Fees

Setting your most profitable prices or fees has as much or more to do with your competitive situation than your costs.

There are two basic approaches to setting your pricing/fees:

1. One for product-selling businesses.
2. One for service-selling and consulting businesses.

The key difference in the two processes for setting pricing/fees is whether you are primarily selling your time or a product.

How To Do It

1.Look at your competitive advantage when setting your prices/fees.

In your earlier work in your Marketing Plan Outline document, you were asked to describe how your company’s solution to a known problem is superior to that offered by close competitors.

As part of this process, you drew upon your experience, and possibly a bit of market research, to discover what benefits your competitors say they offer, and which your company offers.

Now, an important part of assessing where to set one’s prices/fees is to know where what you offer fits into the market place.

If you feel that you can describe your unique benefit clearly, then there may be a case for you to set your prices or fees a bit above those of your competitors.

2. Reveal Your Pricing/ Fees

Whether you show your prices or fees on your company’s website often has to do with whether you primarily sell a product or a service.

Most products offered on webstores are not totally unique to any one given seller. So it is common practice for prospective customers to compare pricing on the same product on a number of websites. If you don’t show your pricing, these people will go right past your website.

For service business and consultancies, on the other hand, most work is bid on a “job or project” basis, where the amount of your time investment can vary widely from client to client.

So, for these types of companies no pricing or fees are shown, but a “Request a Quotation” form is presented on the website to permit the prospective customer to receive a customized job or project price.