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How To Set Your "Right" Price

How do you set the right price for your products and services? The "right" price is the price you are happy with and the price which clients are willing to pay.

My suggestion is to put your pricing through the "Right Price Test." This test involves asking 2 questions:

1. Are you happy with your price?
2. Are clients willing to pay your price?

You need a "yes" to both these questions for it to be the "right" price.

Are You Happy With Your Price?

Just suppose you were able to get as many clients as you wanted at $x, ask yourself:

- Would you be happy?
- Is $x a fair exchange for the value clients will receive?
- Will you resent or appreciate your clients at this price?
- Will you be inspired to go the "extra mile" in service at this price?
- Would you attract your ideal client at that price?

Suppose you charge an hour and the standard is 0 an hour. Imagine that you ended up being booked solid working 8 hours a day at an hour. Would you, at the end of several full weeks in a row, be happy that you were only charging an hour? Is an hour a fair exchange of value? Will you be resenting or appreciating these an hour clients? Would you be feeling like going the "extra" mile in service? Do you think you would be attracting your "ideal" client at this price?

To work out your own "right" price, that you are happy with, assume that there is an abundance of clients for you. Now pick a price for one of your products or services and ask yourself the same set of questions. Keep changing the price until you get a "yes" to all the questions. You will need to do some work to determine the value you deliver before you will be able to answer the "fair exchange of value" question.

Now you're probably saying this is great in theory but even if there was an abundance of clients, would clients pay my price? That question is the second question in the "Right Price" test.

Are Clients Willing To Pay Your Price?

Part of working out if you are happy with your price was to work out all the value you achieve for your clients. The value and the results need to far outweigh the price you are asking people to pay. This is a fair exchange of value.

If I asked you to give me and in exchange I would give you something worth 00 would you give me ? You would, provided you wanted 00 and you believed me.

So the answer to the question "Are clients willing to pay your price?" is "yes" provided:

- they are qualified (have a need/want, money, etc.)
- you know that the value clients receive outweighs the price and you can articulate this
- potential clients can clearly understand that the value far outweighs the price
- potential clients believe you can deliver the value.

I encourage you to put all your pricing through the "Right Price Test." The rewards will then follow for both yourself and your clients.

(c) Tessa Stowe, Sales Conversation, 2006. You are welcome to "reprint" this article online as long as it remains complete and unaltered (including the "about the author" info at the end).


About the Author: Tessa Stowe teaches coaches, service professionals and recovering salespeople 10 simple steps to turn conversations into clients without being sales-y or pushy. Her FREE monthly Sales Conversation newsletter is full of tips on how to sell your services by just being yourself. Sign up now at http://www.salesconversation.com




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