Many small businesses and freelancers believe charging less helps them get more customers. Meanwhile, often times, the contrary is the case. It only gets them, cheap customers, with luxurious demand.
The real truth is people often attribute excellent service to high prices. And charging low will not help your business but make you drop out of the game. Many big celebrated brands like Apple, Gucci, Smart water, and others are famous today, not only because of the quality of their product but also their pricing.
Pricing is part of branding, and people who appreciate the value of your services are very aware of this. If people see the quality of your services, they will definitely forgo the price and go for it.
What is value-based pricing?
Value-based pricing is a concept of establishing the price of a product or service based on the perceived value the product will offer to the consumers instead of the conventional Cost-plus pricing principle.
6 reasons you should adopt the price-value based pricing for your business
Pricing comes with branding. It is crucial you place a good price on your services to help people to see them. Naturally, people tend to attribute value to expensive things. We categorize the cheap ones as fake and call the expensive ones original.
And ironically, it often turns out as fact because the service provider adjusts themselves to this. If you want people to identify your service as something quality, you need to learn how to charge for it.
2. Quality Service
Delivering quality work requires time and effort at your end as a business owner. And Using a value-based principle helps you to be consistent in providing quality service to your customers. You understand your customer are willing to pay for the service; so far, they see the value in it. As such, you wouldn’t have any reason to compromise the quality of your products or services.
3. Save you from frustrated customers
I often tell small business owners that low customers are the most difficult people to serve. They demand far above what they are paying for and hardly get satisfied. Irrespective of the price you give them, they always feel cheated.
To avoid it, I strongly advise you to save yourself this headache and focus on the clients that know the value of your services. They know what they want, and they appreciate you for helping them achieve it.
4. Save you extra time
Why would you do a 5 hours job for $300 when you take an hour’s job for the same price and use the remaining 4 hours to rest or reinvest in yourself? There is no point chasing every prospect up and down. You can earn the money you want from 5 clients from only one client and even get a tip for a job well done! Yeah, it works! And in the long run, you will still earn more than your competition that sticks to the Cost-plus pricing.
5. Increase in Return on Investment
Charging a reasonable price for your services helps you increase your ROI. You will save yourself a lot of time from doing underpaid jobs to do other things that will fetch you more money. You are can even use the extra time to learn additional skills or reinvest in yourself to stand out.
Value-based pricing builds trust from excellent customers. Your customers understand you know the quality of the service they need, and you are confident in yourself that you can meet their expectations.
The philosophy behind this article comes from my personal experience as a freelance copywriter. Hence, it is no longer a theory but proven practical. Meanwhile, it is vital you also work on the quality of the service you will deliver to your clients.
Taiwo Sotikare is an outstanding freelance copywriter and editor with over five years of experience. He has written hundreds of articles on Freelancing, Career Development, and Writing Tips. He is regular content creator at insight.ng and DigitalPud.com and be contacted via firstname.lastname@example.org.