Hi!
I had a nice first Wednesday session yesterday on the idea of planning for 2024.
We are going to hold the first Wednesday of 2024 on Wednesday, January 3rd, 2024 at 1PM Eastern.
The topic in January: Getting a strong start to the new year.
In that vein, I want to talk about how you price your products and services today:
Peter Shankman shared a post on LinkedIn yesterday and mentioned that most people are underpricing:
On Threads, someone quote posted saying Peter was wrong for a number of different reasons like:
- If I charge a business too much, they’ll just have to lay off people.
- If I charge too much, its likely I’ll lose business.
- If I charge too much…
It went on quite a while.
I was amused.
I should have bookmarked the post, but that’s not the point.
Since I seem to be someone people trust with their pricing questions, I wanted to give you some guidelines to set better prices because Peter is right, most of you are undercharging.
It is rare when I see people fundamentally overcharging.
Here are 10 things to think about to set a better price:
- Pricing demands research. Kantar has given us a nice tool to get started.
- Discounts are for dummies! They steal profits. They undermine your brand. They cost you business.
- Stop charging by the hour. People buy an outcome, sell that way.
- Pricing decisions involve tangible and intangible inputs.
- Price = Perceived Value. Manage the perception of value.
- “It costs too much” is a throwaway objection.
- Bundling and unbundling products and services is a good way to maintain price integrity.
- Quantitative data is more important than qualitative data in pricing because people will tend to underestimate the price they’ll pay for selfish considerations.
- Reset your prices, but don’t discount. Discounts are for dummies!
- I do offer a consideration for paying up front. That’s not a discount. That’s trading value. I get the money earlier and you pay a few percent less. But cash in hand is more valuable to me.
- The right price changes over time. You can raise your prices due to new innovations, new knowledge, new skills, timeliness, and other factors.
Do you struggle with your pricing decisions?
Let me know by replying to this email.
You can leave me a note on social media.
Email me Dave@DaveWakeman.com
Or, join our Slack Channel for strategy and branding.
Know someone that needs a boost to set a better price, send them this note!