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Finding the “pricing sweet spot” is a challenge that all business have.  No matter how big or small, how much experience or new to the game, pricing is a continuous question.  Businesses with more experience have history to guide them in setting prices.  But, when it comes to increasing prices, even seasoned business owners have to go through the same process to determine appropriate pricing.  Today, let’s talk about setting the RIGHT price, and ensuring that you’re not priced too low.

So… WHAT is the RIGHT price?

There is no secret formula to determine pricing.  I wish there was!  I would be a gazillionaire.  For now, let’s make a pricing recipe.  This is what your pricing should include…

THE PRICING RECIPE

  • What are the costs to produce your product or service?  These are the actual COSTS that go into producing one wedding or one packaged product.  (These are NOT your administrative and overhead expenses: rent, website, advertising, etc.)  This is typically the cost of your product, raw materials.
  • What is the labor involved with making your product or delivering your service?  Even though, for now, it’s just your man-hours, what would your business look like if you replaced yourself as the lead planner, lead photographer, designer, etc?  What would you paying someone to do comparable work?
  • What experience do you have?  I don’t care if you’ve only been a planner for a year, or if you have only done corporate events.  This is valuable experience.  Make certain to price accordingly.  If you’ve never produced a wedding in your life, get some experience before setting your prices.  (This is the equivalent of someone going to school to get a Masters degree in order to get a better salary.)
  • What is your education in your field?  Have you studied your trade?  Do you continue your education by attending seminars and conferences?  How do you ensure you are up to speed on your craft?  Are you educated in ways that ensure that you run a solid business?
  • What does the market demand in your region?  What do others price in your field?  I don’t want you sneaky-calling and emailing competitors.  I want you to be smart about this.  Meet someone in your field for coffee and have an open discussion about business.  Find out the price range in your area and price accordingly.  Keep in mind that some people are terribly under-priced and they should be considered outliers.  Do not use other under-priced professionals to base your pricing.
  • What value does your product or service bring to the consumer?  VALUE… what is that?  Your product or service is bringing something worthy to that person’s life, to their wedding.  You offer something of value.  What is that value?  Do you relieve someone of the stress of putting together a HUGE life event?  Do you record their event, preserve it in time?  Do you make their day beautiful?
  • What about the quality?  Are your reliable, trustworthy, honest?  Do you deliver in a timely manner?  Are you exceptional with emergency situations?  Is your product flawless?
  • What is your niche?  What is it that you do different and special?  What is that one thing that you offer that no one else does?

Delivering your pricing with CONFIDENCE…

After you spend considerable time considering these pricing factors and set your price, it’s time to deliver with CONFIDENCE.  Yes, it can be scary to ask people for money.  But, this is one thing that you MUST become better at.  GAIN CONFIDENCE.  Stand strong in the service you offer.  Stand strong in your artistry, in your craft.  There will always be customers who “shop around”.  Be true to who you are and the value you offer.  Confidence is an important part of the pricing recipe.  It’s difficult to demand a price unless you truly believe you are worth every penny.  And gosh darn it… you are worth EVERY penny!

Tomorrow… we’ll take a look at whether your pricing is working or not.  Ultimately, you need to ensure your pricing can sustain your business.  More on that on Thursday.

Did I miss one?  Any other factors we should consider when developing a pricing strategy?